Post by @owunnavictor

THE BANK IS NOT YOUR FRIEND. THEY’RE A BUSINESS. 🏦 Imagine buying a newly built home in 2016 at 2.8% and then, years later, being encouraged to refinance that same house at a significantly higher interest rate. Ask yourself: Who benefits from that transaction? The bank makes money when you borrow. So when they encourage you to refinance, don’t automatically assume it’s because it’s in your best interest. In today’s market, voluntarily giving up a 2.8% mortgage for a much higher rate can mean: • A higher monthly payment • Thousands or tens of thousands more in interest • Restarting or extending your amortization • Building equity more slowly • Paying closing costs all over again • Potentially turning a great mortgage into an expensive one And this is why you have to separate “the bank approved it” from “this is financially smart for me.” Banks are not charities. They have shareholders, targets and revenue goals. Your mortgage is one of their assets. So before you refinance a low-rate mortgage just because someone at the bank suggests it, run the numbers. Don’t ask, “Can I afford the new payment?” Ask, “What will this decision cost me over the next 5, 10, 20 or 30 years?” Your bank can be a useful financial institution. But it should never be mistaken for your financial adviser. #financialliteracy #investing #mortgagetips #mortgage #renting