The real estate market and condition is unstable and unclear right now. But behind this instability, home owners can enjoy the low mortgage rate that allows them to do refinancing procedure. However, refinancing isn’t always the perfect and the correct way to save your financial condition. Sure, you may enjoy the low rates offer from the refinancing procedure, but do you know that there are hidden traps or facts that the loan officers are keeping from you? So, before you march to get your new refinancing mortgage scheme, be sure that you know the facts.
Longer Loan Period
You will end up paying more for your mortgage during longer period of time. For instance, you previously have a 20 years mortgage period. When you have new refinancing planning, you will take lower interest rate with longer period of borrowing time. You may have lower interest rate now with the new refinance scheme, but you will end up paying your mortgage for 25 years or 30 years in the future. If you want to spend your time calculating and counting, you will see that your spending for the low mortgage rate – yet with longer period – is probably almost similar to your current mortgage – or even bigger. Don’t be easily fooled with the low new numbers; always be sure to calculate everything in total numbers. Unless you are okay with it, just stick to your current mortgage. If you are doing fine, then you will be okay for the future reference.
Read also: IS MORTGAGE REFINANCING THE ONLY BEST OPTION FOR SAVING THE HOME?
You Will Have to Pay Extra
Whenever you have new refinance scheme, you will be charged with extra cost. The loan officers may not tell you in which subject they will charge you, but such cost always exists. After all, who will pay for the officers if not from the clients’ spending? Either they will charge you completely with the new payment scheme, or they will charge you up front when you are signing and taking care of the new documentation, they will ask for extra charge. Even when they say that the process is completely free or you have claims that you can take, don’t trust them. There IS always extra charge that you will have to pay. After all, the loan officers think that it is your responsibility to take care of your house costs.
Money out Easily
Home owners often forget that they are actually borrowing money for their house and they have to pay everything back. When they refinance, they are blinded by the facts that they can have lower rate and they can get some extra money due to the refinance scheme. They forget that they money they get is actually their own money which they borrow and they have to pay back. If you aren’t careful and you do serial refinancing procures, don’t be too shocked when you have to sell your house and pay for the refinance and the costs.
Refinancing may be a solution for home owners so they can plan their financial spending better and wiser. But if you aren’t careful and you do everything without compiling facts and information, you may end up losing everything.