My step daughter and her husband keep

[bambii]

refinancing there home twice in the last two years. And I took a Class about buying a home so our rates would be cheaper and we learned in that class some time it is worse to do that because in the long run, Like the morgage is for 30 years and when you refinance you start that 30 years over again unless you get a real good rate. the started out at 900.00 a month and then when sown to 850.00. I dont know what it is now after they did it again..

I dont own my house yet, so Im still kind of clueless.

are they doing the right thing??

 

[The Mystery Machine]

Most likely yes. In fact it can shave much off your payment and believe me it helps in the short term. The rates are so low you just can't pass it up...

 

[Lars624]

When we refinanced we also cut the term of our mortgage. We had about 28 years to go & when we refinanced we went with a 20 year mortgage.

 

[SeaSpray]

I know there are "tables" they use to determine whether it's cost-effective to refinance, whether the rate has dropped low enough to make it worth it.

Also, sometimes when you refinance you can get a mortgage for less than 30 years. We bought this house almost 4 years ago, so last year when we refinanced, we not only got a much better interest rate, we also dropped it down to a 20-year mortgage. So we went from owing for the next 26.5 years to owing for 19.5 years (as of now), AND the payments are much lower each month

Some people refinance in order to borrow extra money in order to pay off high-interest credit cards. That in itself isn't bad, but when they people don't cut up those credit cards and they run up the balances again, they're only getting themselves deeper and deeper into debt, AND putting their home in jeopardy.

Sometimes it IS a negative thing to keep refinancing like that, but not always!! You need to know the details involved.

 

[elgerber]

I am a loan processor, and I would say half of the file I've done in the last 4 months, are refinances for people who I just did a loan for in the last year. It's amazing how many people just keep doing it over and over.

Erika