Why To Refinance Your Mortgage
Although you may know of the refinancing process, you may be unsure as to why you should refinance your mortgage – and knowing the facts can be a great way to help you to decide whether you do or don’t need it.
It can help to save money, build your property’s equity and lower your interest rate.
What is a mortgage refinance?
Refinancing a mortgage is basically a process where you pay off the rest of your loan and replace it with a new one at the best home loan rate deal you can find. There are quite a few reasons why people might choose to do this, too.
It can give them the chance to get a lower interest rate, to shorten the time period of their mortgage, it can give them an opportunity to convert from an adjustable rate mortgage (which is sometimes known as an ARM) to a fixed rate mortgage, or the other way around. Also, they may have the chance to tap into a home’s equity, so that they can finance a bigger purchase or consolidate another debt.
Plus, since refinancing can sometimes cost anywhere between 3% and 6% of the loan’s principal, it requires an appraisal (which is similar to how it was when taking out the original mortgage), a title search and application fees, it can be important for a homeowner to find out whether they’ll benefit from refinancing overall.