It’s Not Always about the Rate
When most people consider refinancing their properties, they primarily look at the current interest rates and compare them to the current interest rate they’re paying. That is one way to determine whether refinancing is worthwhile but it certainly isn’t always the best method.
I don’t know about you but I’m guessing that your paycheck doesn’t come in a percentage but rather comes in DOLLARS! Cash is KING in today’s challenging economic times so payment becomes the most important basis of comparison…NOT RATE.
There are so many variables to consider when refinancing:
- What is my current monthly payment?
- Is that Interest Only or PITI (Principal, Interest, Taxes & Insurance)?
- Is that on an Adjustable Rate Loan, Fixed Rate Loan or some other loan program?
- Do I need cash for any other purpose?
- When I am comparing payments, am I comparing apples to apples (i.e. Interest Only to Interest Only, P&I to P&I, PITI to PITI)?
- Am I considering the cost of any additional cash I’m receiving if I were to obtain through some other means of financing (i.e. credit cards, etc.)?
- Am I considering the payments on the all of the debts that I am paying off with this refinance?
While a low interest rate is always more appealing than a slightly higher interest rate, it is not the only deciding factor when obtaining a mortgage.
With that said, there is a new company out there that is changing the face of mortgage lending by eliminating most, if not all, of the costs to the consumer for obtaining a mortgage…whether it be for a home refinance or home purchase.
The company is called FreeHomeRefi.com. Check them out. It is really a refreshing approach to what has been an ethically challenged business for quite some time now.