Should You Refinance or Move?

Refinancing is attractive to many homeowners right now because of the very low interest rates available on mortgages. Most of the major real estate markets in the nation are very much buyer's markets at present, and that also makes it tempting to move for many homeowners. Whether you should take either option, or neither, is a big decision and one that you should make carefully.
 

Refinancing

 
Refinancing is a good option under certain circumstances. If you have your mortgage almost paid off or, at least, have been paying on it for long enough where the end is in sight, refinancing may not be a good option for you. If you're so close to actually owning your home outright, it may not make any sense to extend your loan by a significant amount of years just to get a bit of cash out.
 
There are situations, however, where it does make good sense. For example, if you could reduce your house payments by $100 or more a month, that may make a huge difference in terms of your standard of living. What's important to keep in mind is that the amount of money you save on your monthly payments should not be completely negated by the additional amount of time that you will be paying on the new loan.
 
Additionally, remember that the many "no cost" refinancing options out there are actually not no cost options at all. Most of them simply take the closing costs and other costs associated with getting another loan and roll them into the total amount that you have to pay back, rather than eliminating them completely. Be sure you take this into account and be aware of the fact that the closing costs might be a factor in whether it is worth it for you to refinance at all.
 

Moving

 
The fact that there are many great homes on the market right now at prices that wouldn't even have been believable not too many years ago makes it tempting to move for some people. Whether or not it's appropriate for you to move is dependent upon many different factors, primarily your reasons for moving.
 
If you already have a lot of equity in your home and you're just moving because you see a good deal out there, you may want to reconsider. If you're moving because of the very good reasons that people choose to relocate, it may be something to consider seriously. For example, if you want to move because you found a great deal in a neighborhood that's much better than your own, because you want to be closer to a good school for your kids or because you want to live closer to your place of work and don't want to spend so much money commuting, it may be time to consider making that move.
 
Either of these choices will usually involve expenses. Be sure you're not making an impulsive choice. Where real estate is concerned, the best choices are always thoughtful, well considered and appropriate for you, your financial situation and your future.
- 10/25/2012 10:47:40 AM by Admin | with 0 comments


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