Not sure if a refinance is for you? To help you find out, here are a few common reasons to refinance a home loan:
- If your monthly payment is too much, refinancing your mortgage can extend your loan term and give you a lower monthly payment.
- If you originally took out a mortgage back when interest rates were high, a mortgage refinance can help you take advantage of lower current mortgage refinance rates.
- If you have paid down debt or have more income now, your new credit score and earnings can help you get a better home refinance rate.
- If you have an adjustable rate mortgage, you can refinance to get a fixed rate mortgage. This will keep your payments from changing over time and give you more stability for budgeting.
In addition to a regular refinance, there are other refinancing options for homeowners:
A cash out home refinance provides you with a new loan for more than you owe on your house. This way, you tap into your home’s equity and get some cash you can use.
An FHA Streamline refinance can help you if you have a Federal Housing Administration (FHA) loan. It may have fewer requirements than a standard refinance.
A VA Interest Rate Reduction Refinance (IRRRL) can help you refinance a home loan if your current mortgage is a VA Loan. Like the FHA refinance, VA home refinance may not have as many requirements as other mortgage refinances.
By Larissa Shelton –