There are a number of advantages to refinancing your mortgage loan. The benefits you will realize depend on your individual financial situation. When you refinance your existing mortgage you are simply taking out a new mortgage to pay off the balance of your old mortgage. The goal when refinancing is to secure a new mortgage with better terms and a lower interest rate than your old mortgage. The way to ensure you get a better mortgage is to comparison shop from a variety of mortgage lenders and brokers.
If your financial situation has improved since you took out your original mortgage you could qualify for a better interest rate. Improving your financial situation could be a larger income due to a new job or improving your credit rating. Another reason for refinancing is to secure a fixed interest rate for your Adjustable Rate Mortgage. If you currently have an Adjustable Rate Mortgage, you run the risk of rising monthly payments when interest rates go up.
If you have decided to take the plunge and refinance your mortgage you have several options to get started. Shopping for the best mortgage offer can save you thousands of dollars. When you compare mortgage offers you need to compare all aspects of the loans, not just the interest rates. If you neglect to compare all of the costs associated with the mortgage offers you could end up overpaying for everything from closing costs to lender fees.
You can learn more about your mortgage options, including common mistakes to avoid by registering for our free mortgage guidebook: “Mortgage Refinancing: What You Need to Know.”