Sometimes the best deal isn't the right deal when it's time to
refinance your home
Many people are looking to refinance their home as a means of
pulling money from their rapidly rising real estate. The intent
may be to reduce other debts, finance a vacation or maybe you're
just looking at refinancing your home as a means of getting a
better deal. But are all better deals good deals with looking at
home refinacing options?
One of the best examples of a home refinancing option that is
good for some and bad for others is the interest-only option
mortgage. With this morgtage, you typically only pay interest on
your loan for the first two years and then the morgtage usually
restructures in the third year, with an interest change and a
principal payment. This can seem like an attractive home
refinance option, but look very closely at the real value you
are receiving. Indicicators are that the housing market is
pulling back. Is your home going to be worth more at the end of
the interest-only term to let you cash out or sell and make a
bundle, or are you going to be left holding the bag and
desperately looking for a new option to refinance your home and
keep control of your property? For others, the interest-only
mortgage is a great option that allows people to position
themselves in real estate and leverage their way into their
dream home.
Always look at your home refinancing options and compare issues
such as home equity vs refinance numbers to ensure that the
money you're pulling out of the apparent value of your home
today isn't going to receed if the housing market pulls back in
your area. Nothing is worse that having a morgtage after a
refinancing a home that is greater than your home's new worth on
the open market. Also be sure that you have a plan for what
you're going to do when the terms of the morgtage change. Are
you going to refinance again or sell? Plan your options so you
can set up the very best deal for the next round.
Be sure to look over all of the fees required for a home
refinancing option and do a little math before making any
decisions. Interview multiple loan brokers as well. Choose the
one that you trust. An honest broker will not try to pressure
you and will lay out the options and explain the numbers to you.
If you're still not sure, spend a little money and take your
home refinancing options to a CPA and get an opinion from
someone who knows the numbers but isn't making any money on the
choice you make. If you've found an honest broker, the CPA's
answers will probably match very closely but also remember that
each will look at things from different angles. A difference in
opinion doesn't mean someone is being dishonest.
A home refinance can be a great option for the right situation.
If you feel that it might be the right option for you, get the
facts and and avoid a rash decision. It's your money and you
deserve abundance.