The Facts About an Unnecessary Refinance

I have helped many clients refinance their homes to put them into a better financial situation. Every single time the mortgage loan went through, I was paid a great commission. I have to admit that when trying to sell a mortgage, there is a big temptation to only show one side of the story. For example, If I were to show someone that by refinancing to a lower rate, their house payment would be two hundred dollars less each month that would be one thing. However, the challenge is that there were a total of roughly five thousand dollars in closing costs.

This would take two years to break even. If I were to be more thorough, I would ensure that they planned on living there for more than the next two years. Another consideration is if they are always using up their equity to refinance their home, when they do go to sell it, they have less room for flexibility and less money for a down payment on their new home.

There are obvious reasons for refinances when the numbers are big. I helped a family consolidate their credit card dept of sixty thousand dollars into their mortgage and helped them save over twelve hundred dollars each month. Or imagine someone having enough equity, that if they refinanced they could pull out enough equity to buy an amazing deal from a real estate auction. The point of all this is to be number smart, and to look at things from all angles.

Realty Note Bid (http://www.realtynotebid.com/) is a real estate auctions. Ryan Coisson is a freelance writer.