With rates as attractive as they are now, people are looking to capitalize,”

Despite the savings you may have been able to achieve when refinancing, I am urging homeowners to carefully examine the option. Homeowners should evaluate their situation, calculate the dollar amount of savings, how long it will take to recoup the cost of refinancing and decide how long they plan to be in their home.

I recently read an article printed in a regional online paper which was reporting on a couple who have lived in their home for 14 years and decide now to refinance for a rate decrease from 7.0% to 5.25% touting how they are going to save $300 dollars per month and what a great accomplishment this was!

They were going to catch up on other expenses. In a following paragraph the Loan Officer told how this $300 dollars applied to the balance of their new mortgage could have them paying off their mortgage in 14 years. They only had sixteen left without refinancing and no costs incurred to refinance! This is however the type of information that is fed to people and we just seem to go along with it.

These people have been bamboozled! For 14 years they have been making payments on a mortgage. The mortgage had to be at least $300,000to save over $300.00 per month with the change in interest.

They may be paying $300 per month less in monthly payments but their cost is far more! The 1st payment on the original mortgage @300k would have been $1945.91, 245.91 going towards principal. That is 1 of every 8 dollars going to principal with the rest going to interest. on payment #168 fourteen years later they would have 1 of every 3 dollars going to principal.

Before refinancing, they would have paid $335,312.88 with $69,847.61 going towards principal on a $300,000 mortgage. They have already paid over $335,000 dollars on a $300,000 mortgage and they still owe over $230,000! Now after they spend an average of 3% to refinance they are starting the 8 to 1 ratio all over again! Starting from payment one! This is a GOOD thing? From the title of the article you would think so. That is the type of media marketing that has led Americans to where they are now. Accompanied by a population that seemingly takes everything they read and see on television as gospel has brought us to the crossroads we are at today.

As for the Bailout, forget about it! There will be no bailout for the people. If the government manages to free up credit for the American consumer, who is going to benefit? You just read who! The Banks, The Title and Insurance Companies, all disguised as a bailout for the American people! When in fact all this will accomplish is to reload the debt on the shoulders of American Homeowners and credit consumers.We need to change this type of thinking! Albert Einstein said you can't solve a problem with the same thinking that caused it! If you desire a different way of thinking and managing this type of financial scenario? Come visit my website @ shrinkthatdebt.com. As a Mortgage Loan Officer I am committed to educating people to save as much of their money as mathematically possible! I have illustrated the true cost here, the true savings are illustrated on my blog.

Let’s face it our 2 largest expenses as an American citizen are taxes and mortgage interest! There is a tool, a system that I use to save tens of thousands of dollars on my debt and it allows me to use 100 tax deductions to lower my tax liability. I share about these tools and system regularly on my blog. You can change the way you look at your finances (be more like the bank)and save your hard earned dollars for something other than interest to be paid to the bank. Take control, not just for yourself but for your children. You can educate your children not to fall into this revolving debt.l By doing this one household at a time we can help America get financially well again. There will be no bailout for the people. There will be a bailout by the people, one built on the backs of the working man and woman. The only entity getting bailed out is the Corporation and the Government.