Refinancing a Home
It's more than just an interest rate reduction.
Refinancing is not a process of changing or adjusting your existing mortgage. It's the process of taking out a new mortgage and using the money to pay off your current mortgage. Most people refinance their mortgages to get a lower interest rate. The lower rate translates into a faster mortgage payoff or a lower monthly payment.
But, a low rate isn't the only reason you should consider refinancing. It can also help you:
1. Lower your monthly payment
2. Pay off your mortgage more quickly
3. Lock in a lower rate
4. Get a better adjustable rate for your adjustable rate mortgage
5. Consolidate debt.
When you refinance, you start the loan process over, which means you will be asked to make an application and then undergo a credit check, title search, appraisal and so on. You will incur closing costs just like the first time around.
What you need to do
Determine if refinancing is right for you.
