Skip to content
Zhi Finance » Refinancing decision

Refinancing decision

The decision to refinance a home mortgage is a serious one and should not be taken lightly. Homeowners should give a great deal of thought to this decision to ensure they are making the best decision for their financial situation and personal needs. Some of the factors to consider when deciding whether to refinance are the type of loan chosen, the lender chosen, the fees associated with refinancing and the hassle of the process.

Consider all options

Homeowners who are seriously considering refinancing have a responsibility to consider all of the options available to them. They may have a friend who recently refinanced with a specific type of loan, but that may not be the solution for all homeowners. Each homeowner should consider their own situation and it is unlikely that they will be in the exact same situation as others.

Some options to consider include the type of loan being refinanced. The basic options are fixed rate and adjustable rate. There are also mortgages that combine these two options. A homeowner may have a specific type of mortgage, but the lender may or may not be willing to offer that type of loan to the homeowner. Lenders are more likely to offer fixed-rate mortgages to homeowners with good credit and adjustable-rate mortgages to homeowners with bad credit.

Consider the lender

Homeowners must also carefully consider the lender they choose. This is important because not all lenders are willing to offer the same rates and terms to homeowners. Homeowners may have to receive quotes from several different lenders in a short period of time in order to make an accurate comparison. This is important because rates can change without notice, and homeowners who wait too long to make a decision may find that the rate they were initially quoted no longer applies.

When choosing a lender, homeowners should also consider how responsive the lender will be to their questions. This is important because if a lender is not attentive to homeowners or does not respond to their inquiries in a timely manner, it can make the refinancing process much more stressful than necessary. It may be necessary to choose a lender that offers a slightly higher rate but is more responsive.

Consider the cost of refinancing

Refinancing is not cheap. There are certain costs associated with refinancing. These costs are usually very similar to the closing costs of obtaining the original mortgage on the property. These costs may include application fees, loan origination fees, property taxes, appraisal fees, and other miscellaneous fees. These fees can be quite extensive and homeowners may find that the fees they pay often exceed the benefits they receive from refinancing. In this case, the homeowner should decide not to refinance, as it is not a financially sound decision.

Consider the hassle of refinancing

Let’s face it; refinancing can definitely be a hassle. The time and effort spent researching different refinancing options and contacting lenders to see who can offer the most favorable rates can be quite laborious. Homeowners should consider the time and effort required for this task when deciding whether to refinance. Simply put, refinancing can be a hassle and homeowners are better off spending their time with family and friends rather than running around trying to find the best rate in town.