What are the benefits of refinancing?
Lower interest rate and payment: If your credit has improved or rates have dropped since you got your original loan you could save money on interest and lower your monthly payment.
Change rate type: If your original mortgage has an adjustable-rate mortgage (ARM) you can switch to a fixed-rate mortgage and avoid future market fluctuations.
Change your loan term: Typically, borrowers start out with a 30-year loan. If you would like to pay your loan quicker, you can reduce it to a 20 or 15 year which can also save you money on interest. You also have the option to lengthen your loan term, potentially lowering your monthly payment.
Borrow money against your home equity or consolidate debts: With a cash-out refinance you can borrow money against your home’s equity. This money can be used for any purpose like paying off debts with high interest or home improvements and renovations.
Add or remove a person from the loan: If you were married or divorced since you received your loan you can add or remove someone from the loan during the refinance.
Cancel your mortgage insurance: If you have PMI, you can refinance your home after a certain percent of equity is built, to eliminate the premium that’s included in your interest rate.
Combine two loans into one: if you have a second mortgage or home equity line of credit you can roll them into one loan at a lower rate. This will allow you to make one monthly payment instead of two.