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Money Matters :  Buying a Home

Refinancing: Why and When...Page 2

What Not to Do

There are a lot of things "not to do". I will point out only the 2 most common mistakes I see people make.

1. Setting an unrealistic goal. I have several hundred e-mail inquiries from people who say something like, "I have a 30 year fixed rate Jumbo loan at 8.625% and I will refinance ONLY when rates get to 7.0% at no cost". Sometimes I call people back and say, "Why 7%? why not 5% or 3%? They say, "Well rates are not going to go that low". Right and they are unlikely to go to 7%, no cost also. You should first succumb to the fact that once you can lower your rate at no cost they you should refinance. Don't draw lines in the sand. They get blown away too easily.
   
   
2. The "Once rates start dropping, they are going to continue to drop and I am smart and am going to hit the bottom of the market" syndrome.

Mortgage Calculators:
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•  How much will my payments be?
•  Which is better: fixed or adjustable?
•  Which is better: 15 or 30 year term?
•  What will my closing costs be?
•  What will my refinancing costs be?