Have you ever asked the question, Does it pay for me to refinance my house? This question can be answered in many ways and this article will give you a handful of the answers. If you are thinking about refinancing your home, then you should read this article first.
Does it pay for me to refinance my house so that I can add onto it?
If this is the question you are asking, then the answer is probably yes. If you are going to refinance your home, use $10,000 to finish a basement, $20,000 to add on a room, or are going to do anything else that will add value to your home, then it will pay for you to refinance.
You do need to remember that adding value to your home does not include landscaping, painting, new carpet, or anything cosmetic. You need to be adding square footage, putting on a new roof, finishing a basement, or updating an outdated heating or cooling system.
Does it pay for me to refinance my house and pay off some high interest debts?
This is another situation that will pay for you if you refinance your home. If you have over $10,000 in high interest debt, which would an interest over 15%, then you can borrow against your home to pay that debt off. This will pay for you in more than one way.
First you will lose the high payment on that debt, and second the debt will be gone, which will improve your credit. This is a situation that is good to refinance in.
Now you know a couple of situation where it will pay to refinance your home. If you are refinancing for a lower rate, but extending the terms, then you are not doing yourself any favors. There are other situations that it won't pay to refinance your home, but this is the most common one.
The answer to the question, does it pay for me to refinance my house, is all up to your reasons for doing so. Make sure you are not putting yourself in a situation that you cannot afford and make sure you are not getting talked into something you don't want.
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