Lower Mortgage payment
Lower monthly payments or pay off your home sooner
There are lots of great reasons to refinance your mortgage. Whether you want to save money with lower monthly payments or cash out, refinancing is a great option to meet your financial goals.
You want to lower your monthly payments.
Looking to increase your cash flow? One benefit of refinancing is that you can free up some money in your budget by reducing the amount you’re paying for your loan each month. You can lower your payments by refinancing for a longer time frame, like a 30-year fixed loan. Or, if you’re not planning to stay in your home for more than a few more years, you may choose to refinance at a lower interest rate using an adjustable-rate mortgage (ARM).
You want to reduce the total amount you pay for the home.
If you want to pay off your home sooner and lower the total amount of interest you’re paying for it, you can refinance for a shorter loan term. If interest rates have dropped, you may be able to keep your monthly payment about the same as it is now, and pay off your home a few years earlier. Doing this could potentially save you thousands of dollars in interest over the life of the loan.
You want to use your home’s equity to take cash out.
Another reason to refinance is to take cash out. Taking cash out means using your home’s equity to receive a one-time cash payment during refinancing. To receive cash out, you'll need to get a loan for more than you owe on your principal mortgage balance. Remember that cash-out refinancing also increases your overall level of mortgage debt.
Starting the refinance process
So, you’re ready to refinance? Get a better understanding of your refinance loan options and determine whether a fixed-rate or adjustable-rate mortgage is right for you. Explore current refinance rates and explore other reasons to refinance your mortgage.