Refinance consideration needs a specific and clear plan in mind. Until we clearly know about our goals, things become difficult to judge. So first job is to identify and judge them properly and then evaluate the best way to achieve it. While taking final decision be sure that there isn't any other option open for you.
So, once it is decided some possibilities should be considered. Below are are some of them:-
i) Home equity loan is a very good alternative, so here we need to understand whether this can take care of the purpose.
ii) Talk to your current lenders and find out whether they agree to renegotiate on the previous terms of your loan to keep the business, if so then you save time and save yourself from getting harassed from finding a better deal as well save closing cost money.
iii) If you wish to decrease the length of your loan, then think and check out whether you can make extra payment each year or not.
As a professional finance executive, I hereby want to give my readers some advantages and disadvantages of my explanation:
i) Rate of interest gets reduced than the current one which in turn reduces the amount of monthly payment.
ii) You can avail full opportunity to either extend or reduce the length of loan.
iii) Gives permission to switch over to a different type of mortgage, for example form adjustable rate mortgage to a fixed rate mortgage.
i) Closing cost might need to be paid which sometimes can be substantial.
ii) Extension of a loan can also result in ending up paying more in interest than usual.
iii) Sometimes the new mortgage become larger than the one it replaces.
I hope my readers will follow all the above points and think twice before refinancing.