5 Steps to Refinancing Your Mortgage
Is it time to refi?
Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many common reasons why homeowners choose to refinance:
- The opportunity to obtain a lower interest rate
- The chance to shorten the term of their mortgage
- The desire to convert from an adjustable-rate mortgage to a fixed-rate mortgage, or vice versa
- The opportunity to tap a home’s equity in order to finance a large purchase
- The desire to consolidate debt
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control. Before you plan to refinance, take a thorough look at your financial situation and ask yourself: How long do I plan to continue living in the house? And how much money will I save by refinancing? If you think these answers still point toward a refi, follow these 5 steps to ensure a successful experience.