Should we refinance or not? Should we just pay off the mortgage and forget about refinancing? These are questions homeowners ask a lot; particularly when the interest rates are really low. Still, refinancing can be a bad idea and may harm you in the future. If you’re thinking of refinancing, you may want to consider the following questions before moving forward.
1. What’s your credit situation?
True, there are record low interest rates right now. But, the truth is not everyone can get those low rates. People with excellent credit history and scores, yes. Folks with less than stellar scores, not so much. Therefore, if you’re likely going to pay higher interest rates, you may want to reconsider refinancing.
2. How long are you staying?
There are closing costs associated with refinancing. If you’re not staying long in your home or intend to put it on the market for sale, you’ll find that the closing costs will most likely, be huge. As a result, you’ll probably end up losing way more than could have saved. If you aren’t leaving, however, and intend to stay there for a reasonable length of time, refinancing is a great idea now.
Read more to find out more reasons not to refinance your home