Ask Before Your Refinance

by Julie from Fort Lauderdale, Florida USA

Ask Kate: Ask Before Your Refinance Kate, My friend Denise and her husband Tim are about to refinance their home. They bought it three years ago at the height of the real estate boom, with an interest only mortgage. She and her husband both have excellent credit.

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My advice for Denise? I would advise asking a lender these three questions:

1) By changing from an interest only mortgage to a fixed rate mortgage, how much more would they be paying per month, and overall, in interest rates?

2) Considering they are not trying to take out equity from their home, but making a unilateral move from interest only to fixed rate, does that move have an adverse affect on the existing equity or value of their home?

3) They should lastly ask how this refinance will effect their property taxes in the future, whether it will have an adverse affect causing them to pay more in property taxes, or whether it will help them in some way. Julie

Kate Answers: Ask Before Your Refinance

Hi Julie, Thanks for offering these questions. I like hearing from homeowners because each of us possess a unique perspective depending on individual circumstances.

Your question about property taxes is a good example. It is an interesting subject and a good question to ask before your refinance.

I hope you'll come back to my website Get Your Best Mortgage Rate again in the future. So remember to bookmark Get Your Best Mortgage Rate to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice.

You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,

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P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

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