Refinancing Your Mortgage
Refinancing your mortgage means replacing your current mortgage with a new one. The new mortgage loan pays off the old mortgage loan, and you’ll start making payments on the new loan. People refinance their mortgages for many different reasons – lowering their monthly payment, getting a better interest rate, taking cash out of their home for home improvements, shortening their loan term, or a combination of the above.
If rates have dropped since you last financed your home, you may want to consider refinancing. Other common reasons to refinance include paying off a balloon payment, converting an adjustable rate loan to a fixed rate loan or to extract cash equity in your home (cash out). A few reasons for cashing out include: home improvement, an education fund, and consolidating debt.
Another way to convert equity in your home to cash is a "home equity" loan. A "home equity" loan is an alternative to refinancing if your home loan has a very low rate compared to current interest rates or if you have a prepayment penalty on your loan.
- Reduce Your Interest Rate
- Cash Out Equity for Home Improvements
- Consolidate Debt
- Lower Monthly Payments