When Not to Refinance a Mortgage
As a homeowner, you are constantly looking for the best options to keep your bank account in
the green, and build your savings up. There are always bills and demands coming in, and it may feel overwhelming at
times to deal with all of them. With the economy the way it is at the moment, the month-to-month payments on your
mortgage may be starting to look like an insurmountable mountain of debt. However, because of the opportunity to
refinance, many people are finding a way to relieve that terrible load of stress. The question is, then, when, or
when not to refinance a mortgage?
The Ideal Timing
Depending on the situation, mortgage refinances may be more or less profitable than at other times. There are
times when the lenders market different terms, and it is helpful to be aware of that. This is helpful to know when
not to refinance a mortgage. But besides what the world seems to be doing, it is also important to consider your
own personal situation. For example, if your current loan has a fixed interest rate, and you find that the rate on
the market is lower than what you are paying monthly, you may consider refinancing your mortgage.
What’s the Point?
The whole point of refinancing a mortgage is saving money. By having a lower interest rate, you are allowed an
opportunity to improve your cash flow, having a bit of cash at the end of the month to use for other things.
Although the terms of the refinanced mortgage loan extend a longer period of time than the original loan, it might
just be worth it to you if you can have a little extra money on the side every month.
Where Do I Stand?
The truth of the matter is that your personal financial situation does a lot to determine when to go ahead with
or when not to refinance a mortgage. You are essentially applying for a different loan, and it will be approved
according to your credit history. That is not to say that you won’t find people that will work with whatever you
have, or simply receive an interest rate that is not considered the “lowest possible” option, but having a good
credit history definitely helps the situation. It is a good idea to print off all of your credit reports, and
discuss with your lender the types of options you have. There are also many online sites that can help you to see
what kinds of refinancing opportunities you really have. By learning more and comparing prices, you can then
determine when the best time would be for you to refinance your mortgage.