Most people refinance their home at least once in their life. Is this a good or bad thing? It all depends upon the known facts and circumstances. I came old in an era of very high inflation and high interest rates and high unemployment. Unemployment was working at least 10% in the past due 70s and early 80s as was inflation.
Mortgage rates were up to 14% in that era. Today prefer to claim that they have it worse than previous generations Some folks, in an era of super-low unemployment, low inflation, and absurdly low rates of interest – as well as surging currency markets. Prior to that time, refinancing your home loan was almost an unheard-of thing. You got a 30-year mortgage on your home and you also made the payments on it until you paid it off, of which point you were very near to retirement age. Then you proceeded to go off into retirement land with your house paid for, or you sold the house and shifted to Florida using the proceeds to buy your next home.
- Keep client fees low
- 5 years back from Miami, Florida
- Who will in actuality own the house and how will your interests be protected
- Pacific Life Insurance Company
- Risk protection
But as interest rates started to drop in the 1980s, refinancing became more popular. Banks were in search of lending business, and people with 13 or 14% mortgage loans were eager to find lower rates and lower monthly premiums. But during the real estate growth in the past due 1980s and again in the 2000s, we saw people refinancing for different reasons.
Thus, the cash-out refi was born, along with the home equity credit line or HELOC. Should you refinance your home? That is a piece of advice I’d hesitate to provide anyone because it is very fact-specific and dependent upon your circumstances. In general, though, I’d advise borrowing only a small amount money as possible, as you need to pay lent money back.
What are the advantages of refinancing? 1. Your payment may be lower. 2. You may take cash out. 20 bills (like they show on the billboards) is an advantage. All loans back again need to be paid, with interest. So yes, you finish up with a pile of money, but often easy money easily gets spent, and you are trapped paying it back then.
Your net value is now less than it was before. 3. You can consolidate debt. If you have gotten into credit card debt problems (yes, It was done by me, more than once) you can get a “breather” and refinance your debts with a cash-out refi. The problem is, of course, is that you will be taking short-term money for things such as meals you pooped out the other day and are financing them over 30 years. It’s possible that can be a way to recuperate one’s finances, but the problem is, most people (myself included) after doing a re-fi, consider themselves financial geniuses and venture out and rack up more personal credit card debt.