Refinancing replaces an existing mortgage with a new one, and you can customize details on the new loan including the type of interest rate, the term length, and the amount borrowed. Speaking with a licensed mortgage consultant will help you set clear financial objectives in order to choose the most appropriate refinance package for your home loan.
Should I Refinance My Mortgage?
Whether interest rates are rising or falling, refinancing is common. There are several benefits that homeowners find with refinancing:
- Increase cash flow: Refinancing your home could lower your monthly payment, giving you greater financial flexibility.
- Pay off debt: Refinancing could allow you to pay off high-interest credit card debt.
- Getting a better loan: Whether you want to switch from an Adjustable Rate Mortgage to a Fixed Rate Mortgage, or simply wish to lock in a lower rate, refinancing can provide an opportunity to optimize your loan.
- Increase your long-term net worth: A lower interest rate on your mortgage means you’ll save money over the lifetime of the loan. You can use the extra cash to buy real estate for retirement, save for your child’s college fund, or buy a vacation home.
- Make purchases with less interest: Financing expensive purchases with your home’s equity, lets you take advantage of a lower interest rate than what’s typically available on credit cards.
- Tax deductible interest: Interest on your home’s mortgage is generally tax deductible. A licensed tax professional could assist you with determining your eligibility for any deductions.
Types of Refinance Mortgages:
- Cash Out Refinance: It allows homeowners to increase the amount that they are borrowing by tapping into their home’s equity and pulling out the cash difference.
- Rate and Term Refinance: The interest rate and loan term are the only changes that occur with this type of mortgage.
- Cash In Refinance: A homeowner brings cash to the closing in order to pay down the loan balance that is owed to the lender. This type of refinance is the opposite of a cash out refinance.
Things to consider about refinancing your mortgage
A refinance mortgage typically closes more quickly than a purchase mortgage and often requires far less paperwork. When you’re deciding whether to refinance your home, there are key factors to keep in mind.
- How will it affect you financially? Try our mortgage calculator to figure how much refinancing might help your budget.
- How long will you live in the home? If you’re planning to sell or move in the near future, refinancing with a low interest, Adjustable Rate Mortgage could be the best choice.
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Contact a licensed mortgage specialist to discuss your options for refinancing and don't forget to ask about our I CAN mortgage.
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