What are the Reasons to Refinance My Mortgage?

People seek mortgage refinancing for several reasons, including to:

Lower the Monthly Payment

The main goal of refinancing is to lower your overall monthly mortgage payment. Refinancing allows people to obtain a lower interest rate or better terms, resulting in lower monthly payments. Also keep in mind that you may be able to negotiate a lower rate if your credit score improves.

Convert an Adjustable Rate into a Fixed Rate

Homeowners with a rising Adjustable Rate Mortgage (where your rate rises if current market rates go up) often choose to refinance to a more stable Fixed Rate Mortgage, especially if they can lock in a low rate.

Pay Off Debt

Many people refinance their mortgage to get money to pay off existing debts. Though this is not an ideal way to pay off debt, it can be a good option for homeowners who: 1) plan to remain in their home for the next few years; 2) have minimal closing costs; and 3) can lock in a new interest rate that is lower than the rate of both the existing mortgage and their current debt(s).