Should You Refinance Your Home?

Posted on: 6 May 2021

Home refinances are a great way to take advantage of new interest rates and the equity placed into properties. Many people choose to refinance their homes so they can take advantage of different real estate circumstances. Refinances aren't for everyone, but they can be beneficial to you.

Should you refinance your home? Here is a guide to help you decide this is the right move for you.

You want a lower interest rate

Are interest rates at a competitively low rate and you want to see if you can get in on this action? Even if you don't do a cash-out refinance, refinances that involve a lower interest rate can noticeably lower the mortgage payments you make on your home every month. Call your real estate lender to see if getting a lower interest rate by refinancing is right for your needs.

You want some of your equity in cash

Do you want to take advantage of some of the equity you've put into your home? You can do so by pulling some of the equity out of your home in cash by doing what's called a cash-out refinance. This is where a person refinances their home and then takes some of the grown value of their home out in cash. In other words, if you owe far less than your home is worth and choose to do a refinance, you can not only have your home refinanced at a better interest rate or a term that works best for your needs, but you can do so while putting some cash in your pocket as well.

You want your mortgage to reflect your credit score

Sometimes refinances are done to reflect a person's improving credit score. If your credit score has improved notably in the last few years and you want to have your home refinanced so you can remove mortgage insurance, improve an interest rate — interest rates are largely determined by credit scores — or have other improvements done to your mortgage rate, refinances are just one of the ways to accomplish this.

Your real estate lender or broker will be able to walk you through what it takes to make refinances happen. If you aren't eligible to do a refinance right away on your home, your lender will show you what you need to do to make refinancing a reality in the future. Check your mortgage rate with your current income, interest rate, and other factors to see what you can do to make refinancing your home work for you.