Refinancing your mortgage can be a smart financial move, but it’s important to understand how it works and whether it’s the right decision for you. Homeowners often consider refinancing to lower their interest rate, adjust their monthly payments, or tap into their home equity—but there are key factors to keep in mind before moving forward.

rEASONS TO cONSIDER rEFINANCING

Lower Interest Rate: A reduced rate can mean lower monthly payments and less interest paid over the life of the loan.

  1. Shorten or Extend Loan Term: Switching from a 30-year to a 15-year mortgage may help you pay off your home faster, while extending your term can make monthly payments more manageable.

  2. Access Equity: A cash-out refinance allows you to borrow against your home’s equity to fund renovations, consolidate debt, or cover other major expenses.

  3. Switch Loan Type: Some homeowners refinance from an adjustable-rate mortgage (ARM) to a fixed-rate loan for stability, or vice versa for initial lower payments.

key things to consider

Lower Interest Rate: A reduced rate can mean lower monthly payments and less interest paid over the life of the loan.

  1. Shorten or Extend Loan Term: Switching from a 30-year to a 15-year mortgage may help you pay off your home faster, while extending your term can make monthly payments more manageable.

  2. Access Equity: A cash-out refinance allows you to borrow against your home’s equity to fund renovations, consolidate debt, or cover other major expenses.

  3. Switch Loan Type: Some homeowners refinance from an adjustable-rate mortgage (ARM) to a fixed-rate loan for stability, or vice versa for initial lower payments.