The Big Picture

The big picture is important when considering a refinance.  There are two types of refinance transactions:  rate & term and cash-out.

Rate & term refinances mean you’re only changing the interest rate, term, and balance of your mortgage.  This is a new home loan paying off your existing one.  Why would someone do this?  The two biggest reasons are normally lowering their monthly payment or paying off their home sooner.

Cash-out refinances mean you are tapping into the equity of your home for a variety of reasons.  This includes investing, paying off bad debts, or renovating a home.

When someone is contemplating a refinance, the entire picture isn’t always taken into consideration.  People can get overwhelmed by the idea of extending out their largest debt back to 30 years because this feels like starting from scratch.  However, remember the reason.  You might be re-extending but this provides additional flexibility in your monthly budget.  Can this help with education, savings, paying off other debt, or keep your cash-flow positive?  No one likes debt but mortgages are a different beast.  These are efficient debts which are considered “good” debts.

There are two sides of every decision:  emotional and logical.  I can focus on the logic all day but it doesn’t matter if the someone isn’t comfortable.  This is why I don’t like pressuring my clients to make decisions.  The good news is you know your thresholds.  We have developed a monitor to let you know when those opportunities exist.  Let’s have a conversation to see WHEN the logical and emotional sides of your next mortgage make sense.  I look forward to helping you.

If you have questions on the best route for you, please contact me!

Happy holidays, by the way!!

Mike Pietila
NMLS ID 847850
Senior Mortgage Advisor
Parkside Lending NMLS ID 176162