Are You Considering Re-Financing?
Homeowners who are thinking about
re-financing their home may have a great amount of
options available to them. However, these same
homeowners may find themselves feeling overwhelmed by
this great amount of opportunities. This process doesn’t
have to be so troublesome though. Homeowners can greatly
help themselves in the process by taking a few simple
steps. First the homeowner should establish his
refinancing goals. Next the homeowner should consult
with a re-financing expert and finally the homeowner
should understand that re-financing is not always the
best resolution.
Conclude Your Goals for Re-Financing
The primary step in any re-financing process should be
for the homeowner to establish his goals and also decide
why he is considering re-financing. There are many
different answers to this question and none of them are
necessarily right or wrong. The most critical thing is
that the homeowner is making a decision that will drive
them towards their financial goals. Although there are
no right or wrong answers as to why re-financing is the
right choice there are, however, some reasons for
re-financing which are very common. These reasons
include:
* Lessening monthly mortgage payments
* Consolidating existing debts
* Lowering the amount of interest
paid over the course of the loan
* Paying back the loan quicker
* Gaining equity quicker
The reader may find their mortgage re-financing plan
fits into one of the above goals or there may be a very
different reason for wanting to re-finance. The reason
for wanting to re-finance is not as significant as
determining this reason. This is because a homeowner, or
even a financial advisor, will have a hard time figuring
out the best re-financing option for a homeowner if the
goals of the homeowner are not known.
Confer with a Re-Financing Expert
Once a homeowner has figured out why they want to
re-finance, the homeowner should think about meeting
with a re-financing expert to determine the best
refinancing plan. This will likely be a strategy which
is financially sound but is also still geared to meeting
the needs of the homeowner.
Homeowners who feel as though they are especially well
learned in the field of re-financing might consider
neglecting the option of consulting with a re-financing
expert. However, this is not suggested because even the
most learned homeowner may not be aware of the newest
re-financing options being offered by lenders.
While not knowing about all the options may not seem too
bad, it can have a noticeable impact. Homeowners may not
even be aware of mistakes they are making until they
hear of friends who re-financed under similar conditions
and received more promising terms. Hearing these
scenarios can be quite off-putting for some homeowners
especially if they could have saved considerably more
while re-financing.
Contemplate Not Re-Financing as a Possible Option
Homeowners who are considering re-financing may realize
the significance of evaluating various different
re-financing options to determine which option is best
but these same homeowners may not realize they should
also prudently consider not re-financing as an option.
This is often thought of as the “do nothing” option
because it refers to the conditions which will exist if
the homeowner does not make a change in their mortgage
situation.
For every re-financing option looked at, the homeowner
should determine the estimated monthly payment, amount
of interest paid during the course of the loan, year in
which the loan will be fully repaid, and the amount of
time the homeowner will have to remain in the home to
recoup closing costs associated with re-financing.
Homeowners should also determine these values for their
current mortgage as it can be very helpful for
comparison purposes. Homeowners can compare these
results and often the best decision is very clear from
these numeric calculations. However, if the analysis
does not yield an obvious answer, the homeowner may have
to evaluate secondary factors to make the best possible
decision.
ABOUT
THE AUTHOR
Bob Schwartz, is a Certified Residential
Specialist, and a CA licensed
San Diego real estate broker with. Bob has
over 27 years of residential real estate experience,
authored a number of published articles and served as an
expert witness for
San Diego lawyers. You can contact Bob via
his highly popular
San Diego real estate website.
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