3 Smart Ways to Refinance While Home Values Are Falling

If you’re concerned about refinancing while home values are declining, there is a way to refinance right now and still protect your financial best-interests.

Here are three sure-fire ways to capitalize on low rates and still make sure that you don’t get in over your head.

1. Know Your Home’s Value – Many homeowners assume that their home has a finite value, but the reality is that your home is only worth what somebody else might be willing to pay for it. The refinancing process does usually include getting an appraisal done, but this appraisal is just the appraiser’s best-guess of what your home is worth based on his or her professional opinion and the amount that other homes very similar to yours have recently sold for.

2. Don’t Take All You Can Get – While home values are falling, one of the most fool-hardy things you can do is to drain all of your home’s equity in a cash-out refi. Your home may be worth $300,000 if you refinance today, but within six months or a year, the value of your home could be considerably less. To keep from owing more on your home than it is worth, you should only borrow 75%-80% of its value. Then if the value of your home declines after you sign on the dotted line you’ll still find that your home is worth more than you owe.

3. Get the Best Rate – Home prices may be falling, but it’s still important that you still get the best rate and terms possible for your economic situation. You don’t want to repeat this process again – especially if you’re not sure what the future holds in terms of real estate property values. By locking in on a rate you’re happy with, you can enjoy the security that a reduced monthly payment can provide you. Prices will eventually begin rising again – and when they do, you’ll have even more equity in your home.

Put these three hot tips to work for you today and make the most of today’s low rates by refinancing into a better loan, with better terms based upon your current needs. You don’t have to make foolish financial decisions for which you’ll be paying for years to come. By following my advice today you can protect yourself and make the smartest decision for you and your budget.

Need to unlock your home's equity - but have a few questions? Why not consider a free private email consultation with me, Darrin Roseborsky? There's no obligation or commitments to worry about. Just helpful answers to your questions. Use the short form in the top-right corner to get started. And in a few minutes, you'll have the answers to all of your questions.