In the mortgage industry or personal finance industry, “experts” like to overcomplicate the process — with insider terms, graphs, charts, and complicated products and services. In the end, it is a hype machine to make things out to be more than what they are.
Albert Einstein once said, “If you cannot explain it simply, you don’t understand it well enough yourself!”
Albert Einstein is 100% spot on. A mortgage professional has two jobs: To understand your financial situation and goals, and keep it simple. Refinancing your mortgage is about keeping more of your own money. Think about the lengths we will go to save money:
- The average person spends 15 hours and 39 minutes on research to buy a car to save on average of $2,000.00
- Groupon reports that people spend 1 hour and 43 minutes on their site for an average saving of $18.00.
FACT: People love saving money! Industries are built around this very concept. So it begs the question, why would you not take advantage of the same concept with your single biggest expense? Outside of being self-employed, your home will likely be your biggest expense, so it needs to be the item that is financed properly!
Remember, it is about a goal, not a rate. If you have a rate of 3% or higher should you consider a refinance? Yes, 100%, but not solely for the reasons you may think off the top of your head. You single biggest expenses are:
- Term? Instead of 30 years, you could save hundreds of thousands in changing your term.
- PMI? If you pay mortgage insurance, you could be saving $100 a month. This is real money that is not going to your home.
- FHA? Same deal, hundreds per month is being spent that is not a direct benefit.
- Credit cards? The single biggest expense of your home is also your single biggest resource. You can become debt-free, especially when rates and terms are historically low!
Make it simple. You have the opportunity to keep more of your own money. Create and commit to a financial goal that will eliminate debt and provide more retirement and college savings — all done through a simple refinance.