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Refinancing

Introduction

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Refinancing Introduction

Refinancing a mortgage involves closing your existing mortgage and taking out a new first mortgage or adding a fixed or adjustable rate second mortgage to your present mortgage. Deciding whether refinancing makes sense for you will depend on your particular financial situation and goals. Refinancing can save you thousands over the life of your mortgage or the savings may be off-set by the costs involved in the process. It is important to do a ‘break even analysis’ to make sure refinancing is worthwhile for you. You can use an online mortgage calculator to assess your personal situation.

There are many reasons to refinance a mortgage. You may be interested in lowering your monthly payments by taking advantage of a lower interest rate or by increasing the term or length of your mortgage. Or you may have an adjustable rate mortgage (ARM) whose rates are rising higher than those for fixed rate mortgages. Perhaps you wish to access the equity in your home via cash-out refinancing to pay for home renovations, college, a vacation property or an investment. Or you may wish to consolidate your high-interest credit card debt, and convert it to a tax deductible debt. You may have improved your credit rating and wish to parlay that into a lower interest rate and more preferential terms.

When considering mortgage refinancing, shop around and compare lenders’ interest rates, terms and costs to find the best refinancing product for your needs.