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23 Aug, 2007 in Refinance, Saving Money by Finance Editor

Six Reasons to Refinance

  1. You want to save more
    Reduce monthly payments by getting a lower mortgage rate or a longer loan term. In the second case, your monthly savings increase but you will be paying a larger amount of interest for the life of the loan.
  2. You want to pay down your mortgage quickly
    Shorten the length of your mortgage by reducing the period of repayment. Monthly payments will no doubt go up, but you will be able to save more in the overall interest payment. Moreover, it will allow you to get home ownership in a short time.
  3. You need extra cash
    Borrow more than the unpaid loan balance if you have enough home equity. With the extra cash, you can pay off high interest debts such as credit card balances or installment loans. You gain out of it as the interest on these debts are not-tax deductible unlike the mortgage interests.
  4. You wish to pay off a high interest second mortgage
    If there’s enough equity at your home, you can refinance your second mortgage and combine both the loans into a single loan. The monthly payment on the new loan is likely to be lower than the combined payments on the first and second mortgages.
  5. You want to convert from an ARM to an FRM
    This allows you to lock in at a low rate. You can thus repay the loan with stable monthly payments rather than variable payments throughout the life of the loan.
  6. You want to get rid off PMI
    If your current loan balance is below 80% of the new appraised value of your home, you can refinance and stop paying PMI.

Not sure, let refinance.net have up to 4 lenders try to beat your current mortgage.

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