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Saturday, July 18, 2009

Bad loan Refi

By Jamie Anderson

Mortgage refi is the transaction where you refinance your mortgage. You get rid of an old loan and replace it with a new one. You can save money in the process but there are some risks involved as well. In short, people refi their mortgage to get a better deal. You can get a lower interest rate or a safer long term loan.

The first step to refi your mortgage is to compare your current loan with the new one. Refis cost money. You might get a good deal on paper but be sure to ask for the other charges that go with the refinancing. There is no such thing as a no cost mortgage refinance. Read the fine prints on your current mortgage and see if there are penalties for opting out of the loan early.

If you are planning on doing a refi, make sure you are going to spend the extra money on important things, and not on materialistic items. It is not safe to spend money on things that you don't necessarily need like a new ride or clothes. Think twice before engaging in this activity.

There are tons of available options for refi in the market. It is wise to shop around. Try to conduct a cost assessment to help identify key benefits of your refi. A financial professional can help guide you in the right direction.

Read the entire contract, all of the fine prints, and make sure you are fully aware of what you are getting yourself into. You do not want another bad loan looming. There should never be pressure to sign any deals that you are not comfortable. Getting a refi is something you should understand before signing the deal.

Most refi will result in lower monthly payment. Don't blow that money on unneeded items. Save on things like college, future retirements and so on. Don't think about short term goals like vacation or a new car. Material things are not important when it comes to saving money.

A bad loan refi will help save you money. By reading and understanding these steps, you'll land the best deal on a refi.

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