When taking a refinance mortgage you need to watch out for pitfalls that could actually cripple you financially, and instead of putting you in a better financial position, will dump you into possible financial ruin.

With a refinance mortgage, watch out for the following 2 biggest pitfalls:

1.  Refinance Mortgage Used for Settling Debts

When you refinance to settle debts keep in mind that you will now be refinancing your shorter term, higher interest debts into your mortgage.  It would not be wise for you to keep paying off the minimum amount each month because then you are going to be paying off your credit card or personal loans over 20 or 30 years too. 

It would be better to make optimal use of your refinance mortgage by using the amount you would normally have paid on those high interest debts, but that you will now be saving every month, and put that into your mortgage.

By doing that not only will you save on interest, but you will also be paying off your refinance mortgage much faster.

2.  Use Credit Cards Again

The common pitfall people fall into when doing a refinance mortgage is to say that now they have all this extra credit available, and start using it again.

Not only will you then have a higher mortgage installment due to the refinance mortgage you have taken, but the added credit card installment will also be added.

Don’t do it, cut up those cards and close those accounts after you have got the refinance mortgage and the debts have been settled.

Well, I know that is a lot for you to take in so I am happy to spend some time with you and answer any questions you have about a refinance mortgage and making sure your home loan gets approved. You are welcome to contact my office at 086 110 6204 or send me a personal email at: info@gpfmortgage.co.za