Already secured a low fixed rate? You’re in good shape. But, if any of the reasons below applies to your current situation, you may want to look into refinancing.
Decrease Monthly Payments
If you can get a fixed rate that is lower than the one you currently have, you may lower your monthly payments.
Get cash from the equity in your home
If you have enough equity you can get cash out by refinancing. You can use the cash for home improvements, college tuition, or any other major expenditure you may have. Switch from an adjustable to a fixed rate. If your ARM is adjusting you want the security of a low fixed rate, or if rates have fallen below your current rate, it may be to your advantage to refinance.
You can refinance your mortgage to pay off debt. If you are carrying balances on high interest credit cards, you may save money each month by refinancing. The interest you pay on credit cards simply goes out the window. By refinancing, you can take advantage of a lower interest rate-and that interest is often tax-deductible. (Consult your tax adviser)
Pay off your mortgage sooner.
If you switch to a shorter term it typically saves thousands of dollars in interest and pays off your home earlier. Your payment may not be much higher than what you are currently paying.