There are plenty of benefits to refinancing. When you refinance you replace your current mortgage with a new loan – that means a new interest rate, new payment and new terms.
When you refinance, you may have enough equity in your home to remove some cash. To do this, your new loan must be higher than the balance of your current mortgage. Cash-out can help consolidate debt, such as credit cards. Since your refinance loan is significantly cheaper than loans from your credit card companies, you’re saving more in the long run.
There are many reasons why people refinance their home loans including:
- the option to roll all your debts into one.
- to take advantage of a cheaper interest rate or lower fees.
- to take advantage of other features offered by other products.
- to switch from a fixed to variable rate loan, or vice-versa.
- to access the equity in your home to use for renovations, holidays, other investments etc.