| Homeowners who are considering re-financing | | | | Once a homeowner has figured out why they |
| their home may have a wealth of options | | | | want to re-finance, the homeowner should |
| available to them. However, these same | | | | consider meeting with a re-financing expert |
| homeowners may find themselves feeling | | | | to determine the best refinancing strategy. |
| overwhelmed by this wealth of options. This | | | | This will likely be a strategy which is |
| process does not have to be so difficult | | | | financially sound but is also still geared to |
| though. Homeowners can greatly assist | | | | meeting the needs of the homeowner. |
| themselves in the process by taking a few | | | | |
| simple steps. First the homeowner should | | | | Homeowners who feel as though they are |
| determine his refinancing goals. Next the | | | | particularly well versed in the subject of |
| homeowner should consult with a re-financing | | | | re-financing might consider skipping the |
| expert and finally the homeowner should be | | | | option of consulting with a re-financing |
| aware that re-financing is not always the | | | | expert. However, this is not recommended |
| best solution. | | | | because even the most educated homeowner may |
| | | | not be aware of the newest re-financing |
| #1-Determine Your Goals for Re-Financing | | | | options being offered by lenders. |
| | | | |
| The first step in any re-financing process | | | | While not understanding all the options may |
| should be for the homeowner to determine his | | | | not seem like a big deal, it can have a |
| goals and why he is considering re-financing. | | | | significant impact. Homeowners may not even |
| There are many different answers to this | | | | be aware of mistakes they are making but they |
| question and none of the answers are | | | | may here of friends who re-financed under |
| necessarily right or wrong. The most | | | | similar conditions and receive more favorable |
| important thing is that the homeowner is | | | | terms. Hearing these scenarios can be quite |
| making a decision which helps him achieve his | | | | disheartening for some homeowners especially |
| financial goals. While there are no right or | | | | if they could have saved considerably more |
| wrong answer to why re-financing should be | | | | while re-financing. |
| considered there are, however, certain | | | | |
| reasons for re-financing which are very | | | | #3-Consider Not Re-Financing as a Viable |
| common. These reasons include: | | | | Option |
| | | | |
| - Reducing monthly mortgage payments | | | | Homeowners who are considering re-financing |
| | | | may realize the importance of evaluating a |
| - Consolidating existing debts | | | | number of different re-financing options to |
| | | | determine which option is best but these same |
| - Reducing the amount of interest paid over | | | | homeowners may not realize they should also |
| the course of the loan | | | | carefully consider not re-financing as an |
| | | | option. This is often referred to as the do |
| - Repaying the loan quicker | | | | nothing option because it refers to the |
| | | | conditions which will exist if the homeowner |
| - Gaining equity quicker | | | | does not make a change in their mortgage |
| | | | situation. |
| Although the reasons listed above are not the | | | | |
| only reason homeowners might consider | | | | For each re-financing option considered, the |
| re-financing, they are some of the most | | | | homeowner should determine the estimated |
| popular reasons. They are included in this | | | | monthly payment, amount of interest paid |
| article for the purpose of getting the reader | | | | during the course of the loan, year in which |
| thinking. The reader may find their mortgage | | | | the loan will be fully repaid and the amount |
| re-financing strategy fits into one of the | | | | of time the homeowner will have to remain in |
| above goals or they may have a completely | | | | the home to recoup closing costs associated |
| different reason for wanting to re-finance. | | | | with re-financing. Homeowners should also |
| The reason for wanting to re-finance is not | | | | determine these values for the current |
| as important as determining this reason. This | | | | mortgage. This can be very helpful for |
| is because a homeowner, or even a financial | | | | comparison purposes. Homeowners can compare |
| advisor, will have a difficult time | | | | these results and often the best option is |
| determining the best re-financing option for | | | | quite clear from these numeric calculations. |
| a homeowner if he does not know the goals of | | | | However, if the analysis does not yield a |
| the homeowner. | | | | clear cut answer, the homeowner may have to |
| | | | evaluate secondary characteristics to make |
| #2-Consult with a Re-Financing Expert | | | | the best possible decision. |
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