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.
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.
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