house refinancing?

Question

if your house refinaced at a higher amount in the past and now it refinaces at a lower amount what are the risks

Answer 1

for bank refinance, the only risk that you will face is the floating interest. If you do not want to take the risk, if there is an option, choose a fixed interest, but you will lose out if the interest rates went far below the fixed interest....but one thing you might want to check with the bank that is offering a lower rate is how long you have to stay with them before you are able to take another refinance. If they lock you for 5 years, then no point as interest rates might shoot rocket high within the 2nd or 3rd year, depending on the contract signed. good luck.

Answer 2

I'm not quite sure what you are asking. You refinanced in the past, paid off some of the balance, now are refinancing the lower balance? If so, then there aren't any risks due to that specifically. You will extend the term that you are paying off the loan, you will have some closing costs, but no risks.

Or do you actually mean "appraise"? If your house was appraised higher in the past than it is now, you risk not being able to sell it for as much as you owe on it. You would either have to come up with the difference out of pocket, convince the bank to allow you to short sell, or not sell it.

Hope one of these answers is what you are looking for.

Answer 3

Not sure what you'd term "risks"...
Costs include:
Refinancing costs - appraisals, documents, closing, etc.
If all you do is a straight refinance (amount of remainder on loan), then you'll have another (e.g.) 30-year loan vs what you have now (e.g. 25 yrs left on a 30-year loan).
If you refinance & take out a home equity loan, then you might end up with a higher payment than what you currently have - you'l have to decide if that is a risk.
If you refinance and opt for a shorter loan period than what you currently have, you will have higher payments, and that could be a risk...