Jim and Amy have lived in their home for 8 years, and have no plans to move. Still, they have two sons in college, and they care for Amy’s mother, who is getting sicker. Both Jim and Amy have jobs, but they’re afraid they may actually have to refinance their home in order to pay for these increasing expenses, especially the rising health care costs. Recently, however, one of Jim’s co-workers suggested that he consider refinancing his mortgage instead.
What Are Your Financial Objectives?
Jim and Amy’s monthly mortgage payments are always on time, and they aren’t behind on their other bills. Their mortgage company representative explained that if they did a refinancing, they might indeed lower their monthly mortgage payment.
They could see themselves having more cash each month that they need for their kids’ college education and Amy’s mother.
Before Refinancing You Should Consider the Following:
While lowering your monthly mortgage bill appears highly attractive, you want to make sure your new mortgage’s interest rate works for you. You also want to be sure that, either you will not have fees at closing, or you are charged fees, the total costs are less that if you just left the mortgage the same and did not refinance. You definitely don’t want to do a mortgage payoff, and then find yourself holding a new mortgage that actually winds up costing you more. As your mortgage broker to prepare a comparison chart for you. If you plan on selling your home in the near future, avoiding points and fees at closing will make the most sense. You could even consider buying down points and get an even lower rate at closing.
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