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The- Decision- To- Re- Finance

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					The Decision to Re-Finance

The decision to re-finance a home mortgage is a serious decision which
should not be taken lightly. Homeowners should give this decision a great
deal of consideration to ensure they are making the best possible
decision for their financial situation and personal needs. Some factors
to consider when deciding whether or not to re-finance is the type of
loan to choose, the lender to choose, the costs associated with re-
financing and the hassle of the process.

Consider All of the Options

Homeowners who are seriously considering re-financing owe it to
themselves to consider all of the options available to them. They may
have a friend who recently refinanced with a specific type of loan but
this might not be the solution for all homeowners. Each homeowner should
consider their situation to be individual and not likely to closely
mirror the situations of others.

Some of the options to consider include the type of re-financing loan.
The basic options are fixed interest rates and adjustable interest rates.
There are also mortgages which combine these two options. The homeowner
may have a specific type of mortgage in mind but the lender may or may
not be willing to offer the homeowner this type of loan. Lenders are more
likely to offer fixed interest mortgages to homeowners with good credit
and adjustable rate mortgages to homeowners with poor credit.

Consider the Lender

Homeowners will also have to carefully consider the lender they select.
This is important because not all lenders are going to be willing to
offer the same interest rates and terms to the homeowner. Homeowners may
have to receive quotes from several different lenders in a short period
of time to make an accurate comparison. This is important because
interest rates can change without notice and homeowners who wait too long
to make a decision may find the rate they were originally quoted is no
longer available to them.

When selecting a lender the homeowner should also consider how responsive
the lender is to their questions. This is important because a lender who
does not pay attention to the homeowner or respond to their inquiries in
a timely fashion can make the process of re-financing considerably more
stressful than necessary. Selecting a lender who offers slightly higher
rates but is more responsive may be warranted.

Consider the Cost of Re-Financing

Re-financing is not cheap. There are certain costs associated with re-
financing. These costs are typically very similar to the closing costs
associated with securing an original mortgage on a property. These costs
may include application fees, loan origination fees, property taxes,
appraisal fees and other miscellaneous items. These costs can be quite
extensive and homeowners may find they are often left paying more than
the benefits they are going to gain from re-financing. In this type of
situation the homeowner should make the decision not to re-finance
because it is not a financially sound decision.

Consider the Hassle of Re-Financing

Let’s face it; re-financing can be an absolute hassle. The time and
energy spent researching different re-financing options and contacting
lenders to see who will offer the most favorable rates can be quite
taxing. A homeowner should consider the time and effort required for this
endeavor in deciding whether or not to re-finance. Simply stated,
refinancing is a hassle and homeowners may better spend their time with
family and friends rather than running around trying to find the best
rates in town.


				
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posted:9/28/2010
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