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# 10 The Biggest Mistake Is Probably Not Refinancing Your Mortgage at All

# 10 The Biggest Mistake Is Probably Not Refinancing Your Mortgage at All

The ethics of disclosure to someone you’re doing business with are complex. If the lender needs more information to make a decision he usually asks for it. I feel there is very little of significance I can possibly hide for a lender, including “sketchy credit.” The problem with a transaction like this is that the information disparity between the two parties is usually so huge that it borders on impossible for the typical borrower who isn’t shopping multiple lenders at the same time to get a fair deal.

Unless your report is impeccable, let a lender run it to determine if there are any issues that may have an impact on financing

Many lenders are not willing to front the costs of an appraisal for exactly the reasons you outline. Even with no-cost refinances I’ve done, I’ve paid for the appraisal and other costs up front, and then as long as the loan goes through, the lender reimburses them to me. That seems like a fair way to do it to me.

We were burned this way on at least one of the two refinances we did back in medical school. You’re hardly paying anything toward principal in the first few years of a 30-year mortgage anyway. Once you start adding costs back onto the loan, you’ll really be rowing upstream.

A. True no-cost refinance to 3.5%. Lender pays interest for last half of month ($500), funds new escrow account ($1400) and all fees ($1900).

Pros of a 15 year mortgage- Much less total interest paid overall Psychological effect of being debt free Minimizes fixed expenses later/improves cash flow later- allowing for financial misfortune, part-time work, or early retirement Lower rate (usually about 1/2%) Forced savings Safer from foreclosure sooner

This is nowhere near a no-cost refinance. I didn’t know your county, so I picked a random one, but a quote at Amerisave shows a much higher rate 4.875% with $16k+ in closing costs. Your deal looks a lot better than that. Read more