If you consider refinancing, then stop and think once more. You may need to refinance, you may want to refinance, but what is your main reason of refinancing? As a matter of fact, people find something they want and recognize they have a little equity in their home. So, they rush right away to take out the equity for something frivolous which they could have later if they started to save now for it. The "have to get it now" syndrome win again and even before you know it, another refinance is in the works.
If you are considering refinancing, then do it for whatever reasons that are good for you. If you can obtain a significantly lower interest rate or a lower monthly house payment, then it make sense to refinance. It's not vice to refinance to get the equity and use it for a trip to Las Vegas and place the money you have left on casinos.
If you already have made the decision of refinancing, then make sure it is for a legitimate reason otherwise you spend valuable time and money refinancing one of the most secure investments you have for your future. Why would you want to do that anyway?
Like I said above, the only time refinancing should have any appeal to you is when it is going to save you money on house payments each month and when it is smart business to refinance your home mortgage for future benefit. Then, you still need to reflect on the fees involved in order to refinance. Remember, the banks want to make money off of you every time they see you in front of one of their loan officers, so carefully investigate what those fees are before you commit to a refinance.
Refinancing may be smart business for you but under certain circumstances. However, in most cases people who refinance are not concerned with smart business. But you are, so my advice is: avoid running to the bank looking to refinance a note which is already exactly what you need.
By: Hugh Thorpe