Every homeowner knows how difficult it is to maintain a household. There are so many things that could go wrong in one’s life that committing to significant home payments may cause trouble.
Those who have been in debt knows that the reality of real estate is that it goes up. The value of your house would increase with the limited inventory and the high demand for homes.
Refinancing is always a viable option for every homeowner. With that, if you are asking if refinancing is a good step for you, the following should provide an answer:
First, refinancing is not a one size fits all kind of solution. It has different types which would determine if it is the right step for you.
There is a cash-out refinance which allows the homeowner to take advantage of the increase in price and replace the existing mortgage with a new one. Every person should know, however, that taking out cash-out refinancing is not good for those who cannot handle their payments in the first place. It renews your loan and extends it for a period, but it is not always a solution for those who lack self-control.
There is also a rate refinance where you would renegotiate the interest rates that you are paying. This one is a good step for those who are willing to pay off some of the debt through the equity and place it directly on loan.
Second, refinancing is not free. A common mistake that people think is that their refinancing option is open, so they get shocked when they have to pay about a thousand dollars for it. If you are in a position where you can afford a thousand dollar lost for tens of gain, it should be a good step for you.
Third, refinancing extends the term of your loan. You may feel like you get out of debt with refinancing but what you are only doing is reaching the end of your credit, and you are still in debt.
Now that you know some facts about refinancing, you can make a better decision if it is right for you and your mortgage. A financial adviser could advise you, but it is you who ultimately makes the decision.
Keep in mind that in case you need to ask more questions, you should ask a real estate professional and seek help from the experts.
About the Author
Debbie Caldwell
When you first meet Debbie Harris-Caldwell, you are immediately drawn to her charming Welsh accent and the twinkle in her eye. The well-traveled transplant from Wales is quick to set you at ease and time spent with her promises to be time well spent.
Debbie has been a real estate agent for 40 years and takes great pride in her customer service skills. "I make myself available to my customers when they need me, whether it's on a Sunday Evening or after their long day at work. I make my schedule fit theirs. I also keep my customers updated on everything happening with their listings or purchase, I am their conduit for information." She has built a business following her key principles of clear communication, attention to detail, client advocacy, and comprehensive knowledge of the area. Debbie comes to every new transaction with positive energy, determination, a strong understanding of the currents driving the market, and the expertise that comes from a lifetime of experience. She knows the importance of marketing and whether a home is for sale for $200,000 or for $2 million, she always has professional photography done and creates a listing presentation that best shows off her customer's home.