Mortgage Advisors

mortgage advice

Refinance

Refinancing is the practice of paying off a loan by acquiring another loan. Individuals that choose to refinance are typically interested in securing better loan terms and want to lower their monthly mortgage payments. Refinancing is also a common option for those who want to reduce the life of the mortgage, reduce the risk of an adjustable rate mortgage, or consolidate debt.

There are many factors to consider before you decide to refinance. You will want to find out if your new interest rate will be lower than your current interest rate, and whether you will be able to afford the closing costs and transaction fees. [If you decide to refinance your mortgage, you might be required to pay a large amount of money to pay for up-front expenses and other fees. If these costs are too much for you to bear, you can sometimes have them included in your new mortgage.] Calculate what your monthly payments will be after refinancing.

If you are thinking about refinancing, consider your reasons. If you do not know what your expenses will be, or you expect them to vary over time, you may consider other options. For example, with a home equity line of credit, you can withdraw funds as you need them and choose an interest-only payment option.

In certain situations, refinancing might not be beneficial. If you are close to paying off your original mortgage, or do not plan to keep living in the house for a significant period of time, you should consider your alternatives before deciding to refinance. If you have an adjustable rate mortgage now, find out what the current rates are for fixed rate mortgages. Have you experienced a recent, significant increase in your income? If so, you may be able to make larger monthly payments and shorten the life of your loan.