Are you thinking about refinancing your home, whether to slash your monthly mortgage payments, lower the duration of your loan, or get access to cash to renovate your house?
This big decision requires careful analysis, or you might be stuck with a situation you wish you could escape.
Regardless of the reason behind your quest to refinance, always ask yourself — and, where necessary, a professional — if refinancing your home will save you money, in the long run, or at least not cost you more than you can comfortably handle. All other questions stem from this all-important one:
- Why do you want to refinance your home, and is there any other way to reach that same goal? (In case of a cash-out refinance, for instance, a home equity loan may serve your purpose even better.)
- What will the closing costs amount to?
- Are you going to have to pay an adverse market fee?
- Is this the right time to refinance? If you can get a loan with a low enough interest rate to save you money when you take the entire duration of the loan into account, the answer may be yes.
- Have you looked at all your options? Shopping around for refinancing loans is essential.
Ultimately, unless you are sure that it is in your interest to refinance, it is always better to hold off.