To most folks, inner financial peace means a lot and therefore one can opt for refinancing even when the conditions are less than ideal wile making deals with mortgage brokers who are not necessarily honest. Of course, not every one of them are like this, so it is important to know who you are dealing with before signing anything or paying any kind of upfront fees (in the case of foreclosures).
However, here are a few things that you can consider before trusting anyone completely in matters of refinancing:
1) Understand why you are refinancing your mortgage.
Mortgage brokers and banks will always be biased to their products/ clients even these options may not work out to your advantage, but theirs in terms of commissions. So it is obvious that the loan they are offering you is their best interests and not necessarily yours. Just remember that there are always pros and cons to a refinancing loan, and it is in your best interests to check their loan offers with a trusted financial advisor.
2) Adjustable Rate Mortgage
Most folks would opt for an ARM type loan that might help meet your short-term needs in terms of cash flow. However, even though your monthly payment can drop in opting for one these loans, it will be hard to handle when the rates increase after the low-rate introductory period is over.
3) Numbers, numbers, numbers
One should consider several factors before opting for a refinancing loan apart from the old approach which was taking a refinancing loan if the rates dropped at 2 %. Three factors such as prepayment penalties, closing costs and fees of a new loan as well as property tax should also be taken into consideration before going for a refinancing loan.