Seeking Mortgage Refinance Help

Published by Ketrena | May 8, 2012 | | 0

Aware of the seriousness of the decision on whether or not to refinance their mortgages, more and more people are seeking mortgage refinance help from their financial advisors before taking step. There are also those who seek mortgage refinance help from financial advisors involuntarily, as part of an enforced debt management program.

Approached by a client seeking help with refinancing their mortgage, what the financial advisor will typically begin with is an assessment of the client?s mortgage. When the mortgage was taken, how far into its repayment the person considering refinancing is and the specific terms of the mortgage (interest rates and so on) are among the things that the financial advisor examines closely at this stage. The idea is for the financial advisor to work out whether refinancing the mortgage would really be a good idea.

To have a fuller picture as to whether refinancing a particular mortgage would be a great idea, financial advisors typically also look at the available alternatives in terms of refinancing opportunities, and see whether going for them would constitute a real saving on the part of the client.

The true picture is not always as attractive as it seems from afar.

Granted, the aim in refinancing a mortgage is not always to save money, at least not in the direct sense of the word. There are instances when one may opt to refinance a mortgage with an aim to get some extra loan money on account of their home?s equity. The role of the financial advisor here would be to make such a client aware of the fact that doing essentially amounts to taking an extra loan based on the home?s equity, and the extra loan naturally comes with its interest cost.

Issues to do with the fact that refinancing the mortgage with this objective could extend the mortgage repayment period ? possibly to a time in the client?s life when they may not have enough financial muscle to go on servicing it comfortably ? should also be brought to light at this stage.

And where a person is looking to refinance their home?s mortgage in order to improve their credit score, the financial advisor has to look at what other factors, beside the mortgage, could be behind the client?s falling credit scores. The client should be made aware of the fact that the only way refinancing the mortgage might improve their credit scores is if they are spending too large a part of their income in mortgage repayment, in which case extending the mortgage repayment period with a refinancing arrangement could lead to a reduction in the portion of their monthly or annual income which goes towards the repayment of their loan, and therefore possibly lead into an improvement in their credit score.

The author is a writer that has written an article on when to refinance your home. You can also read other articles on things to know before you refinancing your mortgage.

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