A lot of people think mortgage refinancing is a means to an end of high interest loans, and if you use it wisely, refinancing can free up money to pay off debts, pay for college, or improve your home, but unless you know all the facts, a refinance can hurt you more than it can help you.
For one thing, you may be changing your loan terms to something less desirable, like an adjustable rate, an interest only rate, or have two loans (one usually being a high interest rate). Another thing to be aware of are the closing costs, and bank fees. Often when you refinance your home, they either loan beyond the value of the home, or appraise high, so if you try to sell your home too soon, you may not have enough value in the home to avoid negative equity or to cover the costs of the realtor.
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