Questions about Refinancing

This question was posed to me recently through Quora, the question and answer web site. I did not answer it there because an adequate answer in the short space that Quora likes was impossible. But it made me think about why that was the case, and the result was this article.

“Should I refinance” is what I will call a “contingent question.” Some other examples are:

“Should I retire?”

“Should I trade-in my car?”

“Should I marry Charles?”

Contingent questions are unanswerable without more information provided by the questioner. The interesting thing is that in my 3 other examples, the contingent nature of the question would generally be recognized, so that anyone posing any of these questions would include information that the questioner felt was relevant. But “Should I refinance?” was asked with no additional information provided. This probably reflects a lack of understanding that mortgage refinances have a variety of purposes, and that the success of a refinance depends on a range of factors that vary with the purpose. This article is designed as a guide.

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