Comments on: Refinancing your home Part 2: An Example http://wheredoesallmymoneygo.com/refinancing-your-home-part-2-an-example/ A personal finance blog written by Preet Banerjee Thu, 24 May 2012 10:29:13 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Preet http://wheredoesallmymoneygo.com/refinancing-your-home-part-2-an-example/#comment-3 Preet Sun, 14 Oct 2007 02:02:45 +0000 http://symbiantcapital.com/2007/07/27/refinancing-your-home-part-2-an-example/#comment-3 <p>Good question. That can be an option depending on a few factors, most of them subjective. Sometimes a HELOC (Home Equity Line Of Credit) can compound their problem. You have to understand the nature of their problem isn't that they are bad at math - they view credit as entitlement. In other words if you give them a line of credit for $10,000, it will be close to maxed in short order. Normally the people who are ready for a refinance are those that have multiple lines of credit, credit cards and department store cards, etc. Drastic times call for drastic measures.</p><p>A refinance is more than just a financial strategy, it can be the start of a control-alt-delete for their overall financial philosophy. They have been spiraling into worse and worse of a situation and an "intervention" was required.</p><p>In any case, while a HELOC might be a good choice for those who are normally very good with their budgeting but are temporarily under the gun, a refinance may be reserved for those who are further a-stray.</p><p>In such cases, it would be wise to have a professional advisor force them to cut up and cancel their cards, and monitor them quite closely for the first few months after the refinance - otherwise they can get themselves into even MORE trouble with the new found cashflow and perception that they fixed the problem. Remember the problem is a psychological one.</p><p>Excellent question.</p> Good question. That can be an option depending on a few factors, most of them subjective. Sometimes a HELOC (Home Equity Line Of Credit) can compound their problem. You have to understand the nature of their problem isn’t that they are bad at math – they view credit as entitlement. In other words if you give them a line of credit for $10,000, it will be close to maxed in short order. Normally the people who are ready for a refinance are those that have multiple lines of credit, credit cards and department store cards, etc. Drastic times call for drastic measures.

A refinance is more than just a financial strategy, it can be the start of a control-alt-delete for their overall financial philosophy. They have been spiraling into worse and worse of a situation and an "intervention" was required.

In any case, while a HELOC might be a good choice for those who are normally very good with their budgeting but are temporarily under the gun, a refinance may be reserved for those who are further a-stray.

In such cases, it would be wise to have a professional advisor force them to cut up and cancel their cards, and monitor them quite closely for the first few months after the refinance – otherwise they can get themselves into even MORE trouble with the new found cashflow and perception that they fixed the problem. Remember the problem is a psychological one.

Excellent question.

]]> By: Traciatim http://wheredoesallmymoneygo.com/refinancing-your-home-part-2-an-example/#comment-2 Traciatim Sat, 13 Oct 2007 21:05:09 +0000 http://symbiantcapital.com/2007/07/27/refinancing-your-home-part-2-an-example/#comment-2 <p>I know this is an old post, but why wouldn't they just take a HELOC instead so that they have better payment flexibility? </p> I know this is an old post, but why wouldn’t they just take a HELOC instead so that they have better payment flexibility?

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