http://www.batonrougerealestatebuzz.com/ – Baton Rouge Real Estate: To Refi Or Not To Refi. THAT Is the Question In September 2010

The KCM Blog (Keeping Current Matters…building a home for real estate information) has posted financial tips advice on refinancing in today’s low mortgage rate environment: To Refi Or Not To Refi….THAT Is the Question . Read the entire article at this link and Buzz is providing a few snippet paragraphs below:

“Holy Cow! Have you taken a look at where interest rates are these days??? There are Ten Year Mortgages in the 3.75% range for heaven’s sake! Yes, 3.75%!!! What are some of the issues to consider as you (and all of America) contemplates a refinance?”

1. Does it make financial sense?

If you are considering a “rate/payment reduction” refinance, I typically recommend that people do one simple calculation.

2. What about a refinance to shorten the term of a mortgage?

When examining the possibility of cutting years off your mortgage, you should take a good hard look at how such a move can affect your monthly cash flow.

3. What will my home appraise for?

This is the biggest challenge facing most people. With so many homes underwater, there are many people who won’t be able to refinance.

4. Should I lock in?

Even though conventional wisdom is that rates are likely to stay low for a while, history has shown that when they do go up, they go up quickly and dramatically; therefore, my advice is that if you like the rate you are quoted, lock it and sleep well.

5. How will my income and credit be looked at?

Your refinance creates a new loan that will likely be bundled and sold in a new mortgage-backed security; therefore, this new loan will be underwritten to today’s guidelines (which are tighter than they were a few years back).

The most important thing is to speak with a solid mortgage professional and try to address any hurdles BEFORE you spend your money. Compare the proposed savings; honestly assess your home’s value; review your income, assets and credit; all ahead of time to improve the likelihood of a desired outcome.”