Of course the title could mean a number of things. One of those things is whether to go to college or train for a trade or join the military. Another decision could be whether to retire or keep on with one’s current employment while paying down debt, putting away more money for retirement, continuing to be productive in one’s chosen profession, and on and on. But this is a blog about refinancing one’s home and the related concerns.
And concerns there are! With the unpredictable nature of the stock market, the continuing need of governments for income as well as the loss of well known businesses to the times (Radio Shack is gone!), the horizon for the home owner who is new to the game of purchasing, refinancing and just paying the mortgage is somewhat frightening. If income remains the same, while taxes go up and valuations of homes remain the same or go lower, what prospects for refinancing will the interested home owner have? The answer is, “It depends.”
It depends on your willingness to research your opportunities with various institutions while leveraging your non-performing assets. What does that mean? It means look at the benefit you are getting from various pockets of money and decide whether the savings that you receive by refinancing are worth throwing it all in one bucket to refinance the house and pay it off sooner . . . what do you think?
Well, here we are again in the springtime! With the numbers heating up (somewhat), folks are starting off the house-hunting season by looking for new homes (different from where they currently live, that is). What group are we speaking of but the young families with children. Also, in the house hunter group are those who have waiting to get their debt load down while trying to qualify for tightened requirements for home loans. What numbers are we speaking of? Why the numbers of houses on the market as well as the number of sellers and buyers.
What do we need to prepare for this time. We really need to think about whether this is really the time that purchases should be being made. In particular, those already with a heavy debt load and poor money management skills need to be very cautious during this period for one major reason. The numbers may seem to point to increasing opportunities for purchases but the timing for a purchase may not be here yet for you! Understand that opportunities come and go but you must continue to pay down debt increase your skill in managing your money. Truly the numbers don’t lie but your interpretation of the numbers may need to be more in line with your current situation before taking steps to finance or refinance your house.
No, this is not a post about the current impasse between the congress and the white house. Nor is it a rant about shutting down the government and the “fiscal cliff” or the debt limit. It is a post about refinancing your home with your future in mind. The topics mentioned are interesting but it is safe to say that in six months, you’ll be more concerned about the status of your mortgage than the political complexities revolving around the debt ceiling!
Then, with whom should a conversation be continued? Yourself, of course. Have you pulled out the details of your current loan on your home and looked at the true cost of the loan and the cost of that loan with respect to your cash flow? This is a difficult conversation to begin for the following reasons. For one, what if you have been affected by the temporary loss of income and you were just getting set up to refinance your home? Second, what if you are in the middle of negotiations for a refinance and a glitch occurs in the process, either slowing it down or stopping things altogether? Thirdly, what do you need to to think about if such bump in the road occurs, when the refinance is the cornerstone of your plan to “destress” your finances going into 2014?
Continuing the conversation means not throwing up your hands or throwing in the towel, if something should occur to delay the progress you were making as you refinanced the house using today’s still unusually low interest rates. Continuing the conversation means that you will not drop everything because a delay is or has occurred in the refinance process and that you stay in touch with the lender or mortgage broker to keep your finger on the pulse of the situation.
Most of all continuing the conversation means not giving up and being aware that just because one avenue closes, several others are opening up simultaneously. If you currently own a home and plan to stay in it for the next 10 years, this is probably the time to adjust the finances and the mortgage to go the distance as you continue the conversation with yourself regarding the refinancing of your house.