Refinancing is a good option to consider when interest rates have dropped substantially since you financed your home and you intend to stay for several more years. Refinancing is used to:
- Lower your monthly payment
- Reduce your interest rate
- Pay off your mortgage sooner
- Convert to a fixed-rate mortgage
- Pay for a major purchase or expense
To refinance, you will need a good credit score and at least 20% equity in your home.
Use our mortgage calculator to see if refinancing is a good option for you.
A cash-out refinance pays off your current mortgage and uses your home equity to provide additional money for other uses. To decide if this option is right for you, first weigh the benefit of how you’ll use the money against the amount of time it takes to pay off the loan. Here are some considerations:
- Are interest rates lower than your current financing?
- How much cash do you need?
- What’s the monthly payment amount?
- What’s the effect on your taxes?
- What’s the total cost of borrowing?
- What’s your break-even point?