Save Money or Put Your Equity to Work
With a refinance, you pay off your current loan with a new loan and restructure the new mortgage to fit your needs. You could also save money by either lowering your interest rate, changing the terms of your loan, or both.
Refinancing may be the right decision if your home value significantly increased or current interest rates are low. You may also be able to:
- Shorten your loan’s term to save even more money
- Refinance to a lower interest rate which might also lower your monthly payments
- Convert your adjustable-rate mortgage (ARM) to a fixed-rate loan which will keep your payments fixed and protect you from market and interest rate fluctuations
- Combine multiple mortgages on a property into one mortgage
- Consolidate debt from higher interest rate credit cards or pay off student loans and save money
- Make investments from the cash proceeds or purchase other properties
A cash-out refinance allows you to take cash out of your home equity by replacing your current mortgage with a new loan that is more than the amount owed. This option can help you pay for major expenses like college tuition, debt or home improvements, purchase of a new investment property or a 2nd home and so on.