How refinancing your home saves you money

If you’re a homeowner looking for ways to save money, the first place to look is at your home mortgage. Depending on the interest rate on your existing loan, refinancing could lower your monthly payment and free up hundreds of dollars you could save or use to tackle other expenses.

Other reasons to refi your mortgage include moving to a shorter loan term so you’ll pay off your home quicker. This usually means a slightly higher monthly mortgage payment but you’ll be building equity more quickly and pay less interest over the life of the loan.

Cash-out refinancing

Homeowners looking to consolidate bills may want to consider a cash-out refinancing. This type of loan refinances your current mortgage and gives you additional cash based on your home’s equity. Because the interest rate on your home loan is typically lower than a home equity product or second mortgage, this is an option to consider if you want to take out cash to tackle a major expense or consolidate bills.

Keep in mind that a home refinance usually comes with the same fees you paid when you first got your home loan. These include points, loan origination, appraisals, title search, recording fees, title search and more. The costs can run between three to six percent of your loan.

It is a good idea to shop around and find a lender that fits your needs. Start with your current lender but compare interest rates, fees and points with others to get the best deal possible.

Home Refinance Real Estate Loans