Before you refinance...

So your house has appreciated in value, and you want to pull that equity out. What should you think of before you sign all the paperwork?

1. Why do you want to refinance?

Although, it can be a great idea to consolidate your debt into one monthly payment, make sure you have control over your spending. If you consolidate your debt and run your credit card up again, you won't have the equity to give you breathing room. Be cautious when taking funds out of real estate. A good ideas is to use it to improve the value of your house or to buy more real estate.

2. Know your penalities.

If you break your term with your lender early, they will want some money back. Make sure you are very clear about what your penalty will be from your lender so if you know if a refinance is worth your while.

3. Plan your term and mortgage ahead of time.

Try to plan ahead as much as possible. Do you plan on only living in the home for three years? Then get a three year term. Do you want to pull equity out in a year's time? Make your term a year. Are you planning on upgrading to a new house? Make sure your mortgage is portable. Do you plan on paying it off over the next five years? Get a good pre-payment plan.

As always, a good broker will save you time and money as they will be able to decipher the penalties required, and be able to find you the best program the suits your current and future needs.

As always, I remain available to serve your needs.

Joel Olson
Pacific Mortgage
1.250.814.1627