Mortgage Refinancing or home refinancing refers to applying for a secured loan intended to replace an existing loan secured by the same collateral or assets.

• Should you refinance your existing mortgage?
• Will you save by refinancing your mortgage?

The goal of mortgage refinance is to reduce interest rate and monthly payments. Typically home refinancing is done when you have a mortgage on your home and apply for a second loan to pay off the first one. It is important to first determine whether the amount you save on interests balances the amount of fees payable during refinancing.

If you purchased your home when interest rates were high or if you have an adjustable rate mortgage, chances are refinancing at a lower interest rate and term may be able to save you money immediately and over the course of your loan. Lenders will typically allow you to borrow up to 75% of the appraised value of your home in a cash-out refinance.

Benefits /advantages of home refinancing

• Reduce monthly mortgage payment
• Reduce the term of the mortgage
• Option to switch from an Adjustable Rate Mortgage (ARM) to a fixed rate loan
• Tax deductible savings
• Eliminate Private Mortgage Insurance (PMI)
• Turn equity into cash

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