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Refinancing Your Home - Is the Time Right?


Refinancing your home is a major decision not to be takenlightly, even in this era of low interest rates and easymoney. While every mortgage company in town is touting thestrategy of getting a new loan before rates rise again,there are several things you'll want to be mindful of beforeyou go about refinancing your home.

In my view the key to refinancing your home isn't just therate they're offering you: it's the total package looked atnot only in terms of today, but a few years down the road.Many people have taken out new loans that really weren'tquite right for their long term situations, thinking they'dbe able to refinance again in the not-too-distant future.That may or may not prove to be true. No one has a crystalball that'll give you a definitive idea of just where rateswill be even a year from now, so try to approach this with asomewhat more long-termed view. It's very easy to gettempted by the prospect of easy, fast cash, but in the endyou end up giving it all back in terms of higher payments,and worst case, be unable to make your payments and loseyour home. Just look at all the costs associated with thisnew loan, determine what the payments will be in 2, 5 and 10years, or whatever your timeline is, and make an informeddecision unfettered by a mortgage broker's "opinion" what's"best" for you. They have a vested interest in getting youinto a loan, any loan, and WILL NOT, repeat, WILL NOT, haveyour best interests at heart when you go about refinancingyour home.

Some things to consider when refinancing your home would bethe type of loan,(fixed,ARM, etc.) the rate, the term, thecosts associated with the loan, any cash equity you'd liketo take out, and the time and documentation necessary forrefinancing your home. This is a wildly competitive market,and please do yourself a favor and shop around. The sameloan one lender will offer you can vary greatly from anotherjust down the street as far as total costs go. Don't beafraid to say no: they're not doing you a favor by "giving"you this loan. They're reaping many thousands of yourdollars in interest, so make sure you get what you want, notwhat they want to sell you. Remember, you're refinancingyour home, not their summer vacation!

All in all, when refinancing your home, take your time. Shoparound, compare, and you are the customer, and what was thatthey say about the customer always being right? You are, aslong as you do your homework when refinancing your home.

Keith Thompson is a real estate investor and webmaster at Mortgage LoansToday where you can find more information and resourcesfor refinancing your home


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