Are you thinking about refinancing your home? There are times when getting a new mortgage makes sense so long as the benefits outweigh the costs. Here are some answers to your questions about refinancing your mortgage.
1. What is Refinancing?
By refinancing, you take the principal you’ve built up to pay off the existing loan and then take out a new loan for the balance, meaning the loan amount will hopefully be less. People do this for a number of reasons. One is to reduce the mortgage payment. If the interest rate is now lower than it was when you first bought your house, refinancing can mean smaller payments.
Or if you’ve got some equity built up and your home is now more valuable than it was when you bought it, you can refinance and take cash out for other purposes. Your loan will increase in that case, but … Read the rest