Why Bother Refinancing – Series
by Evan Vanderwey on 08/03/10 at 1:11 pm
There are many articles being written right now that are highlighting the fact that interest rates are at all time lows but home owners are not making application for new mortgages at as high of numbers as one might think.
The reasons given for this are many and varied:
- Homeowners don’t believe they can refinance because the value of their home is too low.
- The costs are too high because of all of the rate and pricing adjustments that Fannie Mae and Freddie Mac are levying.
- The second mortgage notes they hold are prohibitive.
- Some wisely hold back because they foresee a time soon that they will be selling their home and then the cost they paid and the rise in their loan amount would not be earned back in time.
- Rates will be rising soon and so I probably won’t have time.
- I’ve even heard one client tell me that they did not believe in the government stimulus, so if using the new Fannie Mae rules that allows for refinancing a lesser value home as the only way they could get it done well, then they weren’t interested.
What are they serving at those tea parties!?
One of my featured posts is called “My Economy vs. THE Economy”, this is the same idea. Every family’s situation is different and so there is no one right answer for every family
Over the next few days, I will write about four or five situations where I advised against my client going forward with a refinance. I’ll change the numbers enough so that no one will find themselves in the analysis – but the principle will remain. Then I’ll give a scenario where if it were different it may have changed my mind.
The point in all of this is to gain the kind of depth of information that is necessary for me to put myself in their shoes and then tell them what I would do given certain assumptions if I were them. Since no two situations are a like, be sure not to find yourself too quickly in any one situation. Get the facts in your situation.
Here is the moral of this week’s posts:
If you ought to participate in the most beneficial mortgage market of all time, then don’t hesitate, rates will not wait around all year for you. But if you shouldn’t, then don’t let all the hype convince you otherwise.
You can always call my office for a free 15 minute phone consultation.
I hope these help you!
