Things to Consider Before Refinancing

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					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:2/12/2011
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