Considering a refi

aaronWith rates at record lows, my wife and I are considering refinancing our home. Here are some things to note as you consider this possibility too (Note: this is the first refi for both my wife and I.)

  • Work with an experienced mortgage pro. I can’t stress this enough. We have been truly blessed with Jim (our mortgage pro). He knows the business well, is patient and isn’t afraid to tell you the truth. The first time I met him he told me my priority should be getting out debt before purchasing a home. If only more mortgage folks would have done that before the housing crisis.
  • Consider the pros and cons. After meeting with your mortgage pro, you’ll probably have a pretty good idea of whether or not refinancing is a good option. Ultimately, the decision comes down to you. Consider how long you plan on owning the home. Are you undecided? How much is the refi going to cost you vs. how long it will take to “pay it off”? If you are planning to sell your house in 5 months after your refi, it’s probably not worth your time. However, if you think you’ll stay in the house another 5 years, a refi could be worth it.
  • Refinancing is just like buying a home. The old mortgage has to be paid off, and in place, a new mortgage is installed. So, expect that the refi is similar in paperwork to when you first purchased.
  • Look at No Cost Refinances. You really don’t want to be paying a ton of refi costs. So, ask about a no-cost refinance. But, beware this is not necessarily a “free” refi. The costs of these are that you may have to accept a higher interest rate or part of the “costs” are built back into the mortgage.
  • Ask away. Be sure to ask questions if you don’t understand the process or the pros and cons. If you feel your mortgage professional is dodging the questions or doesn’t seem real helpful, reconsider who you are working with. I’ve found the most trustworthy professionals are those who welcome questions and seem to truly care about you as a customer. Those who resort to pressure tactics or “salesy” talk generally aren’t people you want to work with.

What has helped you as you’ve gone through the refinance process?

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