There is a video on CNBC.com that has several bloggers talking about serial mortgage refinancing. Many homeowners out there have refinanced their home loans every year trying to get the best refinance rates. Is this a good idea and will you ever recoup your origination fee and closing costs? Here’s an article on the FiveCentNickle.com that explores the advantages and risks of serial mortgage refinancing.
I recently ran across an interesting story on CNBC about “serial refinancing” – the practice of refinancing your mortgage time after time as rates improve. On the surface, this makes perfect sense. If you can drive down your rate without incurring additional costs, why not?
Here’s a link to the original video on CNBC.com:
The article and video talk about using an ARM for your refinance mortgage loan; however, the video breezes over the risks associated with ARMs. Mortgage rates are near 50-year lows and really can’t go much lower. If you take an Adjustable Rate Mortgage, foregoing the opportunity to lock in your interest rate your payments are going up when the loan starts resetting.
Another valid point to consider is after refinancing the clock on your home loan resets. Suppose you’ve paid on your existing home loan for 15 years. Once your mortgage refinancing is complete, you’re back to paying for 30 years…starting from scratch so to speak.
Once you’ve decided to go forward with mortgage refinancing it’s important to pay close attention to the fees like your loan origination fee and closing costs. Just getting the best refinance rates available in the past 50 years doesn’t guarantee that you’re getting a good deal. You still have to recoup your fees and closing costs before gaining any benefit from your new home loan. The more you pay, the longer it takes to break even.
You can learn more about getting today’s best refinance rates without overpaying the lender or your broker by checking out my Free Underground Mortgage Refinancing Videos.