Mortgage Refinancing

There are many good reasons why you should refinance your mortgage. You can lower your interest rate and your mortgage payments. You can also get better terms that could make easier to pay off your mortgage faster.

Added benefits to refinancing include the ability to use part of your home’s equity to pay off other debts or finance projects such as home improvement or repairs. The equity is the difference between the value of your home and the balance of your mortgage. If your home’s value exceeds your mortgage balance you have equity.

A refinancing is simply a new mortgage that replaces your old mortgage. In a refinancing your existing mortgage is eliminated and you get a new mortgage usually with a new lender and new payments.

How to Refinance Your Mortgage

Refinancing your mortgage is just like getting a mortgage. You contact a number of mortgage lenders see who has the best deal and go through the mortgage application process again. There are many mortgage refinance lenders online that can help you refinance your mortgage.

You will get a much better deal on a mortgage refinancing if you have a good credit rating. This means you should check your credit rating before applying for refinancing. You should try and remove any false or inaccurate information that can damage your credit score from your credit report before seeking refinancing.

Your existing mortgage lender might be willing to refinance your mortgage if you ask them. If you have a good history of making mortgage payments and equity in your home your existing lender might give you a good deal on refinancing. An existing lender might be more willing to overlook a bad credit score than a new lender.

When to Refinance Your Mortgage

You should only refinance your mortgage when you know you can get a better deal on refinancing than you have with your existing mortgage. Check around and see if you can better terms and a lower interest rate. If you can’t it probably isn’t worth the trouble to refinance your mortgage.

You should always refinance your mortgage if you can lower interest rate. A lower interest rate will mean lower monthly mortgage payments. This could save you money and make it easier to pay off your mortgage.

If you have an Adjustable Rate Mortgage or a mortgage with a flexible or floating interest rate you should refinance your mortgage to get a fixed interest rate. A fixed rate means that the same interest rate is locked in for the duration of the mortgage.

If your mortgage doesn’t have a fixed interest rate your lender might able to raise your mortgage interest and your payment at any time. Fixed interest rate mortgages usually have the same payments for the life of the mortgage.

When Not To Refinance Your Mortgage

If you have just a few payments or a few years left on your mortgage refinance is probably not a good idea. You will be better off if you just pay off the mortgage because you will eliminate your housing payment completely and give yourself more disposable income. Extending your mortgage makes no sense in such a situation.

You should also not refinance your mortgage if the mortgage refinance lender isn’t going to give you a better deal than you’re getting now. Only refinance a mortgage when it is to your advantage.