Holiday Refinancing

What is the holiday refinance?

It’s a time in the mortgage world leading up to a major holiday that we experience a higher volume of refinancing applications.   Although people all have different reasons to refinance, the core theme tends to remain the same.  Here in my experience are the 2 major reasons:

1) Shortfall of Cash

2) Trigger of cash analysis

Refinancing for both these reasons can solve the problem, but I would argue, if you’re doing it for reason:

#1 it’s a quick fix and you may simply want to consider changing your expectations and budget to avoid unnecessary refinance cost.

#2 which in theory should happen quarterly for a family anyway to ensure they’re making good financial decisions and reducing their interest costs where they can to pay down debt faster, then there’s a lot of merit in looking at this.

If you’re considering this for yourself, then I would encourage you to make sure that reason #2 is the underlying theme even if reason #1 one is a further benefit of this.  Otherwise, you’ll find the potential break penalty to access cash will not be saved back in reduced long-term interest cost and leave you spending more than you’d like to have that perfect holiday.

– Narish