When interest rates fall, many people think about their mortgage – and the possibility of lowering their monthly payments through refinancing that mortgage.1
Refinancing a mortgage involves many of the same steps you encountered when you purchased your home: gathering information about your income and debt obligations, applying for a loan pre-approval decision, obtaining an appraisal. Plus there may be a few new steps involved – if you’re consolidating your home loan with other debts, for instance.
But it all begins with a very important first phase: evaluating and deciding on a loan product that works for you.
Extra cash every month is an appealing prospect. But you should first make sure the new loan will live up to your expectations. Will the decrease in the interest rate turn out to be large enough to make financial sense? Will the new length of the loan, its costs and fees outweigh any potential savings? This guide will help you arrive at the best decision for your situation.
1 By refinancing your existing loan, your total finance charge may be higher over the life of the loan.