[Loansource-customers] Can There Be A Bad Time To Refinance???

[Jim Slaight]

Rates are down, refinance!!! Or at least that's what everyone is saying.... 
 
Truth is, sometimes NOT refinancing is the thing to do, even if first
mortgage rates are low. 
 
I had a customer contact me about six months ago. At that time, we did a 2nd
mortgage loan that consolidated his family's monthly expenses and saved them
$1,100 a month in credit card and car payments. 
 
That's a good thing. 
 
But he called me again recently, and said "Jim, everyone at the office is
talking about refinancing. I want to check in. Should I be doing another
refinance?" 
 
This customers' first and second mortgage interest rates were higher than
the first mortgage rate I could get him today... and on the surface it
looked like a refinance could make sense... but....
 
Home values are flatter these days.... and we could do a new first mortgage,
but this customer may have not had enough equity to avoid paying mortgage
insurance on a new, larger first mortgage. Worse yet, he could spend a few
hundred dollars by doing an appraisal, and only them find out that the value
needed to avoid mortgage insurance was not there. 
 
And.... we had just consolidated all his consumer, credit card, and auto
loan debt six months earlier... so really... there was nothing else to
consolidate that would improve his monthly cash flow significantly more than
we already had.
 
Morale of the story: Sometimes, it's OK to say no. 
 
Jim Slaight
Broker/Owner
LoanSource Funding, LLC
Foundation Funding, LLC
W: 360-567-2582
F: 360-450-2429
HYPERLINK "mailto:jims at lsfloans.com"jims at lsfloans.com
HYPERLINK "http://www.lsfloans.com/jims"www.lsfloans.com/jims
 
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