Mortgage Refinancing
Mortgage refinancing is the process of replacing your existing mortgage with a new one, typically with different terms, to achieve financial benefits. People usually refinance their mortgages to:
Lower your interest rate
Refinancing may help you secure a lower interest rate, which could reduce your monthly payments, and the total amount of interest paid over the life of the loan.
Paying down your debt
By consolidating your debt into your mortgage you can increase cash flow, and as a result pay down your mortgage and debt sooner.
Home renovation
Taking out equity to renovate your home.
Home equity line
This can be used for future investment or immediate investment with an interest-only minimum payment. The line for credit is open so can be paid down at any time without a penalty cost.
Down payment for new purchase
You can take out equity to use for a down payment to purchase a property.
The refinancing process typically involves applying for a new loan, undergoing a home appraisal, and covering some costs (such as lawyer closing fees). Whether refinancing makes sense depends on your goals, the costs involved, and the current mortgage market conditions.