According to Consumer Reports, “Some 58 percent of homeowners who have mortgages—that’s about 28 million households—pay interest rates that are higher than today’s bargain rates. Many could save thousands by refinancing”.
When monthly payments and interest rates begin to pile up, refinancing is often a viable option. But what is refinancing exactly? And will it work for you as a homeowner?
Replacing an old mortgage with a new one is called refinancing. During this process, a new mortgage is created by paying off an old mortgage. Generally, refinancing occurs in order to lower monthly payments, reduce interest rates, or cash in on equity.
Will It Work For Me?
Over time, if you make payments promptly and increase your credit score, you will be able to take out loans with lower interest rates. Therefore, refinancing can save you hundreds of dollars in interest. Likewise, if you have built equity on your home, refinancing can help you make a significant purchase while avoiding taking out an additional loan. There are a number of ways you can approach refinancing, and timing matters. So if you’re wondering what the best time is to refinance a home, check out this article.