When you refinance the mortgage on your house, you’re essentially trading in your current mortgage for a newer one, often with a new principal and a different interest rate. You will use the newer mortgage to pay off the old one at closing, so you’re left with just one loan and one monthly payment.
There are a few reasons people refinance their homes.
- You can do a cash-out refinance to make use of your home’s equity.
- To do rate-and-term refinanceto get a better interest rate and/or lower monthly payment.
- To change a mortgage type. Like change an ARM loan to a low rate fixed-rate mortgage, or refinance a FHA loan to a conventional loan.
- To remove another person from the mortgage, which often happens in the case of divorce.
- To add someone to the mortgage.
The refinancing process is similar with home buying process but less complicated. Please contact us for a free consultation to determine the possibility and potential rate for a refinance.