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.
Once you know the reason for refinancing, you should ask your mortgage specialist whether or not it would be beneficial for you to refinance at this time or whether it may be more beneficial to wait.
If you want to make sure the interest rate your lender offers you is the rate you get when you close the loan, ask about a mortgage lock-in (also called a rate lock or rate commitment). Any lock-in promise should be in writing. Make sure your lender explains any costs or obligations before you sign.
Weigh the costs carefully of how long you will be staying in your home vs. how much of a savings you will be getting in a refinance. Make sure you include closing costs in your 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.
