Home Refinancing FAQs
What is home refinancing?
When you refinance, you’re replacing your current mortgage with a new one that typically will offer different rates and terms that are more beneficial to you.
What are the benefits of refinancing a home?
Refinancing your home can offer a number of advantages:
- Paying off your home sooner by reducing your mortgage term.
- Building equity faster with a shorter mortgage term and different monthly payments.
- Lowering your monthly payments by changing your mortgage rate and term.
Refinancing can allow you to take cash out for home improvements, college, debt consolidation and more.
What is a cash-out refinance?
With a cash-out refinance, you use your home equity to replace your existing home loan with a new one for more than you owe on your house. You then receive the difference as a cash payout.
When does it make sense to refinance a home?
- You decide not to move instead of buying a new home and want to save money over time.
- You have an adjustable-rate mortgage that could cost more due to rising interest rates.
- Your home’s value has increased, allowing you to tap into higher home equity by refinancing.
- You’ve been in your home a short time and want to build more equity via refinancing.