Refinancing
Refinancing will remind you of what you went through in obtaining the original mortgage. That’s because, in reality, a mortgage refinance is simply taking out a new mortgage. You will encounter many of the same procedures-and the same types of costs-the second time around.
Refinancing can be a good idea for homeowners who:
- Want to get out of a high interest rate loan to take advantage of lower rates. This is a good idea only if they intend to stay in the house long enough to make the additional fees worthwhile.
- Have an adjustable-rate mortgage (ARM) and want a fixed-rate loan to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.
- Want to convert to an ARM with a lower interest rate or more protective features (such as a better rate and payment caps) than the ARM they currently have.
- Want to build up equity more quickly by converting to a loan with a shorter term.
- Want to draw on the equity built up in their house to get cash for a major purchase or for their children’s education.
Financial contracts can be very confusing. Before signing yourself to a major long term commitment have an attorney, familiar with financing and taxes, examine and explain the details (where the Devil is). A good tax finance attorney can save you many times his fee over the years, not to mention possible legal problems.
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