Mortgage loans A tutorial
Because of this trap, many refinance experts tell their clients to avoid a no cost refinance unless they can pay it off quickly, reducing the financial impact of the higher interest rate. There are also several other good reasons to opt for a no cost refinance despite the interest rate. Maybe you are low on cash right now, but expect to have more money in the not so distant future, and you want to take advantage of a dip in interest rates. Or maybe the higher monthly payments are offset by tax advantages triggered by the higher interest rate. You may even find a no cost refinance that comes with an interest rate low enough to be competitive, especially if you foresee that interest rates will rise considerably before you have the cash on hand to do a traditional refinance.