Why Refinance
To save money! Whether it's lowering your monthly payments or reducing the number of years on your loan, refinancing could save you TONS of money. When you refinance, you often seek to replace your current mortgage loan with a new loan that has a lower interest rate. If you have other debts and want to combine loan payments, that is also an option with a mortgage refinance.
Benefits to refinancing your existing loan include:
- Lowering monthly payments. You may choose to refinance for reasons that have nothing to do with getting a lower interest rate. For example, you may decide to refinance to lower your payments.
- Paying off consumer debt. Refinancing may allow you to borrow additional money (a "cash-out" refinancing) to pay off credit cards or other debt or even to use the money for another purpose.
- Combining monthly payments. Refinancing lets you combine two mortgage payments into one payment, hopefully at a lower rate than the average rate of the two payments. If for nothing else at all, combining your payments cuts the time you spend paying bills.
- Changing the loan terms. Perhaps you want to ease the burden of making payments on a 15-year mortgage loan by refinancing with a 30-year mortgage. Stretching out your loan term reduces your monthly payments.
