By Bob Schwartz, CRS, GRI, San Diego real estate
broker
�2007
Broker For You
All rights reserved.
Homeowners who are contemplating re-financing their home may have a wealth of
opportunities open to them. However, these same homeowners may find themselves
feeling overwhelmed by this great amount of options. This process doesn�t have
to be so difficult though. Homeowners can greatly assist themselves in the
process by taking a few simple steps. First the homeowner should decide on his
refinancing goals. Next the homeowner should consult with a re-financing expert
and finally the homeowner should know that re-financing is not always the best
solution.
Establish Your Goals for Re-Financing
The first step in any re-financing process should be for the homeowner to
establish his goals and also decide why he is thinking about re-financing. There
are various different answers to this question and none of them are necessarily
right or wrong. The most vital thing is that the homeowner is making a decision
that will push them towards their financial goals. While there are no right or
wrong answers as to why re-financing is the right choice there are, however, a
few reasons for re-financing which are very common. These reasons include:
* Lessening monthly mortgage payments
* Consolidating current debts
* Lessening the amount of interest paid over the course of the loan
* Paying off the loan quicker
* Building equity quicker
You may find their mortgage re-financing plan fits into one of the above goals
or there may be a completely different reason for wanting to re-finance. The
reason for wanting to re-finance is not as critical as determining this reason.
This is because a homeowner, or even a financial advisor, will have a rough time
finding the best re-financing option for a homeowner if the goals of the
homeowner are not known.
Speak with a Re-Financing Expert
Once a homeowner has determined why they want to re-finance, the homeowner
should think about meeting with a re-financing expert to decide on the best
refinancing strategy. This will likely be a strategy which is financially sound
but is also still geared to meeting the needs of the homeowner.
Homeowners who feel as though they are especially well learned in the subject of
re-financing might consider neglecting the option of consulting with a
re-financing expert. However, this is not suggested because even the most
learned homeowner may not be aware of the newest re-financing options being
offered by lenders.
While not knowing about all the options may not seem too bad, it can have a
large impact. Homeowners may not even be aware of mistakes they are making until
they hear of friends who re-financed under similar conditions and received more
promising terms. Hearing these scenarios can be quite off-putting for some
homeowners especially if they could have saved considerably more while
re-financing.
Think About Not Re-Financing as a Feasible Option
Homeowners who are thinking about re-financing may realize the significance of
evaluating numerous different re-financing options to determine which option is
best but these same homeowners may not realize they should also thoroughly
consider not re-financing as an option. This is often referred to as the �do
nothing� option because it refers to what will happen if the homeowner does not
make a change in their mortgage situation.
For each re-financing option looked at, the homeowner should determine the
estimated monthly payment, amount of interest paid during the course of the
loan, when exactly the loan will be fully repaid, and the amount of time the
homeowner will have to remain in the home to get back closing costs associated
with re-financing. Homeowners should also calculate these values for their
current mortgage as it can be very helpful for comparison purposes. Homeowners
can compare these results and often the best decision is quite clear from these
numeric calculations. However, if the analysis does not yield an obvious answer,
the homeowner may have to appraise secondary characteristics to make the best
possible decision.
ABOUT THE AUTHOR
Bob Schwartz, is a Certified Residential Specialist, CA licensed real estate
broker with www.Brokerforyou.com. Bob
has over 27 years of residential real estate experience, authored a number of
published articles and served as an expert witness for
San Diego legal firms. You can contact Bob via
e-mail at brokerforyou@gmail.com or visit his highly popular
San Diego real estate website at:
http://www.brokerforyou.com
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