Four-Step Guide to Refinancing Your Home Mortgage
Refinancing your home mortgage can be a great way to save some money in the long run. If rates have dropped since you obtained your original loan, you can potentially see a substantial drop in your payments. But there are other reasons you may also want to consider refinancing your home mortgage.
It gives you the option to reach into the equity that’s built up in your home since you purchased it — it’s known as a “cash-out refi.” It lets you take out a new mortgage based on the home’s current worth, pay off what you still owe on the old loan, and pocket the difference, Realtor.com says. You could also shorten the time period that you’ll be making payments, which can be done by swapping your current 30-year mortgage for a 15-year loan or another similar option.
But how do you know when it’s a smart move for you to go through the refinancing process? And when exactly will it start saving you money?
Click through for our guide to help you determine if it’s the right time to refinance.