David Brown

Before You Refinance in 2023, Here’s What to Consider

These 6 questions will help you decide yes or no.

Published

2 years ago

January 23, 2023

David Brown Instore January 2023 Issue

UNLESS YOU’VE BEEN living under a rock, you’ll be well aware of the large-scale movements in interest rates over the last six months. Central banks around the world have been increasing rates as a means of dampening down spending habits in an effort to bring inflation under control. With the cost-of-living skyrocketing from a combination of supply chain issues, energy shortages and an increase in the availability of cheap money during the Covid lockdowns, it will be interesting to see if they can negotiate a fine line between slowing demand and pushing the economy into recession.

From a personal perspective, you may be weighing up your refinancing options if you’ve been on a low-rate loan whose fixed period is ending soon or you have a need for additional funding. Will rates continue to increase (making a new fixed period desirable now), or is it best to ride it out and wait for interest rates to come back down again?

Unfortunately, I don’t have a crystal ball regarding the Fed’s actions, but I can suggest there are a few questions you need to consider before making your decision.

Your current interest rate. What is the increase in interest costs you can expect from refinancing? Can you afford the extra outlay?

Your timeframe. How long until your current interest rate arrangements end? How long until your loan will be paid off? These questions will affect your overall cost through the remaining life of your loan.

Your reasons for refinancing. Is this a ‘must have’ or a ‘nice to have’? If the refinancing is avoidable, should you wait for more solid economic signals?

Fees and other costs. What refinancing costs will there be? Refinancing often comes with administration fees, broker’s fees and legal fees among others, which can add a considerable amount onto your true cost. Make sure you take these factors into consideration.

The impact on your credit rating. Will refinancing affect your ability to borrow in the future?

The value of your security. Has your secured asset increased in value since the last financing? Is there a risk of it reducing in the current market, leaving you exposed?

These simple questions will help you set a clearer vision for your refinancing. It pays to discuss this in more detail with your mortgage broker, financial planner or CPA to consider all the factors that can affect your decision.

Family Legacy, New Chapter: How Wilkerson Turns 89 Years of History Into Future Success

After 89 years of serving the Albany community, Harold Finkle Your Jeweler faced a pivotal decision. For third-generation owner Justin Finkle, the demanding hours of running a small business were taking precious time away from his young family. "After 23 years, I decided this was the time for me," Finkle explains. But closing a business with nearly nine decades of inventory and customer relationships isn't something easily managed alone. Wilkerson's comprehensive approach transformed this challenging transition into a remarkable success story. Their strategic planning handled everything from advertising and social media to inventory management and staffing — elements that would overwhelm most jewelers attempting to navigate a closing sale independently. The results speak volumes. "Wilkerson gave us three different tiers of potential goals," Finkle notes. "We've reached that third tier, that highest goal already, and we still have two weeks left of the sale." The partnership didn't just meet financial objectives—it exceeded them ahead of schedule.