If the value of your home has increased or if you can lower your interest rate, it might be a good time to start thinking about refinancing your home. By refinancing, you can tap into your available equity to fund home improvement projects, consolidate high-interest debt or lower your monthly payment. Refinancing can allow you to convert the type of loan you already have (i.e. from an adjustable-rate mortgage to a fixed-rate mortgage), shorten the term of your loan, or get a lower interest rate. If you’re looking to save money in the long term, you should consider refinancing your home.
The best time to refinance is when interest rates drop or the value of your home rises. When mortgage rates fall or the market value of your home has gone up, you can take advantage and either lower your monthly payments or shorten your repayment term. You can also refinance to use the increased equity in your home to pay off high-interest debts or finance a big purchase like tuition or a wedding. When considering refinancing, keep in mind that it is best to refinance in the earlier years of living in your home as that’s when most of your mortgage payments will be primarily going towards interest.