Many homeowners have been refinancing their current mortgage in order to take advantage of lower mortgage rates, which are round 5% at the current time for homeowners who qualify. Refinancing can bring a lower mortgage rate for many homeowners and if they have equity built up their home they may get money back as well.
However, the primary reason for many homeowners refinancing is they are getting a lower monthly mortgage payment, in cases where homeowners qualify for a lower mortgage rate. Not everyone is guaranteed to get a lower monthly mortgage payment by refinancing, but homeowners who have equity in their home and a good credit score have been able to refinance to a 30-year fixed rate mortgage and as a result they have seen a decrease in their monthly mortgage payment.
Also, homeowners that are refinancing to a 30-year fixed rate mortgage and getting money back due to the equity they have built in their home are using this money to pay down their mortgage principal, which is another great way many homeowners are making their mortgage affordable over the life of their home loan.
There are expenses related to refinancing and homeowners shouldn’t jump into this arena without considering the pros and cons. The homeowner must be on stable enough financial ground to afford the costs of refinancing and they need to be in a good position with their credit score in order to attain a lower mortgage rate and monthly payment. Homeowners need to do their homework and make sure that refinancing is in their best interest before proceeding.