Be careful with a refinance or a new mortgage...

I just want to make sure you understand your choices when you decide to refinance your current loan or when you want to get a new mortgage.

The foreclosure rate pretty much increases every year due to the fact that the customer doesn't always understand what they sign!

You get an offer for a 2/28, a 3/27, interest only bla bla bla because the rate is better but UNDERSTAND!!!

Be careful and ask the right questions.

These mentioned before are not fixed rate!!! They are fixed for 2 or 3 years and then they go adjustable. That means you rate WILL go up and then your payment will go up every 6 month so so...

Here's an example:

2/28
mortgage: $150,000
7.25%

Current monthly payment (principle and interest): $1023.26
That payment is fixed for 2 years, then it will be an adjustable mortgage. I know what you are thinking... "I will refinance at a lower rate in 2 years..."! OK but what if:

1- You credit score went down a little?
2- You income situation changed or any other story here...

You will be in trouble because you monthly payment could go from $1023.26 to $1234.01.

That is a big OUCH!

Plus if you refinance, you will use the equity you built in your house to pay once again for those fees. If you can, go for a 30 year fixed right away! Refinance 10 years down the road and cut 5 years on your mortgage if you can! Plus try to put a few extra dollars on your monthly payment.

Enjoy!