Refinancing your home is a major financial 按揭, and should be handled carefully. You need to evaluate your current situation, determine whether or not you can afford the new loan, and choose your new mortgage lender wisely.
How soon is too soon to refinance a mortgage?
Refinancing can save you a significant amount of money. The lower interest rate on your new mortgage can cut your monthly payments, reduce your overall interest costs, and increase the equity you have in your home.
If your credit is good, you may be able to take advantage of a loan offer that combines a lower interest rate and a shorter term. However, you should still shop around for the best deal.
A good refinance calculator can give you an estimate of the closing costs you’ll pay. You’ll also want to compare lenders, the types of loans they offer, and any fees they may charge.
A cash-out mortgage is another way to borrow more money. This refinancing option allows you to pull cash out of your home to pay off your current first mortgage or to fund a home improvement project. You can then use the extra cash to pay off your second or third mortgage, consolidate your first and second mortgages, or pay for college tuition.
A cash-out refinance may be a smart move for some homeowners. For instance, those with a high credit score and a good debt-to-income ratio could benefit from a loan that pays out more than the value of the home.