Refinancing is often used to lower your interest rate. If rates have dropped since you last financed your home, you may want to consider a refinance. Other common reasons to refinance include converting an adjustable rate loan to a fixed rate loan or paying off a balloon payment or to extract cash equity in your home (cash out). A few reasons for getting cashing out include: home improvements, education and consolidating debt.
Another way to convert equity in your home to cash is a “home equity” loan. A “home equity” loan is an alternative to refinancing if your home loan has a very low rate compared to current interest rates or if you have a prepayment penalty on your loan.
Benefits of a Refinance
- Reduce Your Interest Rate
- Lower Monthly Payments
- Cash Out for Home Improvements
- Consolidate Debt