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.