With mortgage rates at historic lows, it’s not surprising so many people are looking to refinance their home. Is such a move right for you? Here are a few things you need to know.
Several refinancing options
Many homeowners seek to refinance to lower their monthly home mortgage payment. However, you can also pursue refinancing to change the duration of your loan, cash out the equity of your home, remove your mortgage insurance requirement or change the structure of your loan.
While refinancing is a popular option today, there are still risks. Many mortgages include a clause that assesses penalties if you pay down your mortgage with a line of home equity credit. You may also incur fees in the beginning hiring the proper professionals to manage the refinancing process.
Stay with what you know
Most lenders will want you to have been in your home at least one year before attempting to refinance. It’s also better to try and refinance with your original lender as this can remove fees and time associated with title searches and property appraisals. It also offers you a better chance at the most favorable rates.