Refinancing Objectives

             The first step when deciding to refinance is to establish a clear objective.
"If you think you may lose your job but you have one now, your focus should be to lower your overall payment regardless of the length of the loan," says Pickel. "If you want to be debt-free by a certain year, then you need to find a loan that meets that objective."
             Sometimes, even with a lower interest rate, you could end up making higher monthly payments because wrapping in the closing costs has increased the size of your mortgage.
Every borrower should look at the cost of refinancing along with the financial benefits before choosing a loan, Busch says. Some borrowers forget that refinancing into another 30-year mortgage can add years of payments, especially if they have been paying on the current loan for a long time.
"A 10/1 ARM (adjustable-rate mortgage) or a 10-year fixed-rate loan can sometimes be a better choice depending on the individual borrower's circumstances," Busch says.


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