| Refinancing a fixed rate mortgage is usually only | | | | as a 15 year term, can save you thousands on interest |
| suggested when interest rates fall, but you can also | | | | payments, even if you don't have a lower interest rate. |
| save money by changing your loan terms. You can | | | | However, your monthly payments will be 10% to 15% |
| also pull out part of your equity to pay bills or renovate. | | | | higher. |
| Lower Interest Rates | | | | You can also reduce your monthly payments by |
| In general when interest rates are at least 1% lower | | | | refinancing for a longer term. You trade lower |
| than your current mortgage rate, it pays to refinance. | | | | payments for higher interest costs. |
| But you need to consider other factors, such as the | | | | Access Your Equity |
| length of your mortgage, loan costs, and how long you | | | | Whether you want to pay off credit cards or pay for |
| plan to stay in your home. | | | | your child's education, you can pull out your equity by |
| An adjustable rate mortgage (ARM) should also be | | | | refinancing. One of the advantages of using your |
| considered if you plan to move soon. With rates lower | | | | equity is that your interest is tax deductible. |
| than a fixed, you will see lower monthly payments. But | | | | However, if you just want to tap into your equity, a |
| you have the risk that your rates and payments will | | | | better option is a home equity loan. You can pull out |
| increase over time. | | | | your equity, write off your interest on your taxes, and |
| To help decide if refinancing makes sense for you, | | | | avoid loan fees. |
| calculate the difference in interest payments over the | | | | Online Lenders |
| course of your loan. Online mortgage calculators can | | | | Online financing companies allow you to research |
| help you find both total interest costs and monthly | | | | terms and fees from your home. You can receive |
| payments. | | | | quotes within minutes online, so you can compare |
| Better Loan Terms | | | | finance packages. You can also apply online and |
| Besides lower interest rates, you can save money by | | | | qualify for discounts on closing cost with some lenders. |
| converting to a better loan term. A shorter loan, such | | | | |