Calculate the financial benefit of refinancing in one, two, or three years. Does the benefit compare with your plans for staying in your home?
Be Patient. Processing all of the paperwork that's required for a new loan takes time. Be patient while your loan moves through the system. Protect your credit score by paying your bills and making your mortgage payments on time and not taking on any more new debt than you absolutely have to.
Be Inquisitive. It's your responsibility to make sure that you understand the terms of your loan. Ask questions and listen carefully to the answers. Don't sign your loan documents until you are satisfied with the information and confident that you have made the right decision.
When you do a cash-out refinance you are leveraging the equity in your home in order to receive a lump sum of cash at closing. Many individuals and families use this type of loan if they want to remodel their home, or they have kids that are attending college soon. Veterans and other military personnel can now take advantage of a 100% cashout refinance thanks to the Veterans Benefits Improvement Act of 2008.
Refinancing can be the right move to improve your financial situation, but be careful. Making the wrong move can put you much worse off. Smart and simple choices will go a long way toward keeping you financially secure.
