3 Reasons NOT to Refinance Your Mortgage During a Holiday Season

Why it Pays to Wait to Refinance Your Mortgage

If you own a home, you have probably been inundated - especially if it's a holiday - with offers to refinance your home. Various reasons are given - to consolidate debt, free up cash, do home improvements, etc.

As a former mortgage consultant, I'm the lone wolf crying, "Don't!" - especially during a holiday. Why? 

1. Misuse of Funds: Refinancing during a holiday is like going to the grocery store when you are hungry - you will overspend, or spend unwisely. During a holiday, every commercial, piece of mail, telemarketer - not to mention friends, family and co-workers - is pulling at your purse strings. This is no time to have extra cash on hand.

Wait until the holiday passes. Why? This is when most tend to refocus on bills, school, work, etc. The frivolity is past you.

2. Resolutions: According to a 2003 national online study commissioned by the Consumer Electronics Association, nearly 74 percent of Americans have made New Year's resolutions at some time in their life.

The tradition of the New Year's Resolution goes back to 153 B.C. when Janus, a mythical king of early Rome, was placed at the head of the calendar. With two faces, Janus could look back on past events and forward to the future. The purpose in relaying this information?

For thousands of years, it has been ingrained in us to make a fresh start, turn over a new leaf, during a holiday (Passover, Christmas, Easter, etc.). Taking control of finances - eg, save more, spend less, invest, etc. - consistently ranks in the top 10. So, if you can make it past the spend, spend, spend mindset of a holiday season, you are more likely to do the right thing with your money if you wait until after the season is over to refinance.

3. Tax Season: At the beginning of the year, you will begin to be inundated with offers - yet again - but this time, from financial and tax advisors.

This presents a great opportunity to speak with a professional and get an overall checkup on your finances - which can include talk about how refinancing your home will impact you. Maybe you'll find out that a home equity loan is better for you, or that if you restructured your finances you wouldn't need to refinance.