When to Refinance

Crest of the Hill
Creative Commons License photo credit: ryanrumsey

To refinance or not to refinance, that is the question. If you have a fixed rate mortgage then it’s easy to tell if the current purchase rates are better than they where when you locked in to your loan. If you have an adjustable rate mortgage or ARM, then you’re rate is changing and probably on the rise, but it’s a good idea to check with a financial planner to see what their take on the future trends is.

If you didn’t have 20% for a downpayment when you made your purchase there’s a pretty good chance you got stuck with a PMI or private mortgage insurance bill. If you’ve built up some equity in your home and refinancing will eliminate that additional payment, you’d be wise to refinance and save yourself from those future charges.

There are other reasons to refinance and those reasons have nothing to do with lowering your mortgage payments or getting a better deal. In these situations it’s best to consult with a financial adviser and weigh your options. It’s not always easy to repay finances that you take out of your home.

To get the most out of your home, make a list of your financial goals and needs and then look at your situation to assess what your best options are.