Low mortgage rates are putting the spotlight on refinancing. But refinancing can accomplish more than lower your interest rate and shrink your monthly home loan payment. Here are some other reasons to consider refinancing:
You want a fixed rate home loan. When you purchased your home, you took out an adjustable-rate mortgage. But you plan on staying in your home over the long term and want the predictability of a fixed-rate home loan.
You want to get rid of your monthly mortgage insurance payment. Generally, private mortgage insurance is required when your down payment is less than 20 percent. In some cases, though, if you have increased your home equity past the 20 percent mark, refinancing can help you get rid of your monthly mortgage insurance premium. It all depends on your home value as determined by an appraisal and your outstanding mortgage balance.
You want to tap your home’s equity. Depending on the amount of equity you have in your home, you may be able to ‘cash-out’ of some of your equity during the refinancing process.