Top Reasons to Refinance
This page is dedicated to explaining the benefits of home loan refinancing. We'll also help you decide if a home loan refinance quote is right for you.
Why You Should Refinance
Here are some of the reasons that lead people to pursue a home loan refinance quote.
- To secure a low, fixed rate. If rates have dropped since you took out your fixed-rate mortgage, refinancing could dramatically lower your payments.
- To upgrade the features of an ARM. Adjustable-rate mortgages have caps imposed on how much your payments can rise in one year and over the life of the loan. If you are unhappy with the caps on your current ARM, you might be able to negotiate better features by refinancing.
- To change to an adjustable-rate or fixed-rate mortgage. Switching to an ARM is sometimes a good idea when current market rates are not especially low. The low initial interest rate on an ARM can give you considerable savings. On the other hand, if rates are on the way up, you might switch to a fixed-rate mortgage to secure a low rate for the life of your mortgage. You can get a home loan refinance quote on both ARM's and fixed-rate mortgages.
- To lower monthly payments. If you use your home loan refinance quote to extend the life of your mortgage, you can lower your monthly payments significantly.
Deciding if a Home Loan Refinance Quote is Right for You
To help you decide if refinancing makes sense for you right now, ask yourself these questions:
- How long do you plan to stay in your home? The longer you intend to stay in your home, the more refinancing makes sense.
- What's the prepayment penalty on your mortgage? Before you apply for a home loan refinance quote, know exactly how much of a prepayment penalty you'll have to pay on your current mortgage.
- How much will you lose in tax savings? Lower interest rates will mean reduced tax savings. Consider how much you will lose in deductions.
- How much will the new mortgage cost? Consider application fees, closing fees, insurance and legal costs, etc.
For the answers to the most commonly asked questions about home loan refinancing, see our FAQ page.