When is it best to refinance?
Answers | 2
Get together with your mortgage advisor to discuss your situation in greater detail.
Next, my crystal ball can't tell you the "best" way for you. I can give you some insight into some reasons for refinancing:
1) Lower Interest Rate - One of the best reasons to refinance is to lower the interest rate on your existing loan.
2) Shortening the Loan's Term - This can build up your equity sooner.
3) Converting Between Adjustable-Rate and Fixed-Rate Mortgages - You may be able to save on interest payments.
4) Tapping Equity and Consolidating Debt - Keep more equity than debt.
The Bottom Line
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used responsibly, it can also be a valuable tool in getting your debt under control. Before you refinance take a careful look at your financial situation, and ask yourself: How long do I plan to continue living in the house? How much money will I save by refinancing? Focus on things like the payback period, increasing your household's net worth, and the true cost of financing.
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It's not what you make, it's what you keep that determines your lifestyle.