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friends and family say they have your interests at heart, as long as you choose them. No, the homeowner must already want to seek refinancing for it work out right. Be sure you want to do this, and get the advice of a trusted financial advisor. Consulting an advisor is a good decision.

Of my numerous refinancing experiences, the first one was the best decision I had made financially. I went online to LendingTree.com. They really do as they say they will. After filling out the simple application, indicating the kind of loan, the worth of the house, etc, I received six emails from prospective bankers interested in doing business. Using LendingTree was a good decision.

Pitting one banking institution against another was my favorite part of the process. I would quote the quotes by one bank and forward them to another institution to see if they really could beat the other offer. If you pay attention to the terms of the offers, then you become well acquainted with some of the fine print issues that tend to snag us after we've signed. Make the banks earn your decision.

One snag was the interest-only option. That is one kind of refi to avoid at all cost. No kidding. In a desperate move last year, before foreclosure became a reality, I convinced my wife that the interest-only option would be worth the short term hassles. Bad move. Worst move a homeowner can make. Interest-only options turn your ownership into a rental situation. After a year of mortgage payments, nothing has gone to the principal of the balance you owe. Avoid interest-only.

Our biggest mistake was relying on the income we had. In considering a refinance, don't look just at the market, the interest rates, and the cash out. Look at the future, the unknown. Can you afford a refinance if you lose your job?

My realtor/friend said equity is more important than extra cash to cover bad debts, like credit cards and car payments. The equity in your home is the best reason to maintain the only good debt there is, the house payment. Trust good advice.

I was wrong. It was the last bad decision I would make in refinancing. All the money articles admonished homeowners for considering the interest-only idea. Now, we are in foreclosure. You? It's all dependent upon what's been requested!

Learn more about this author, James Tigerlobo White.
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