Refinancing Your Home Mortgage: The Basics & Benefits

Refinancing is converting your current home loan into a new one. For several reasons, someone may refinance, including reducing monthly mortgage payments, lowering the interest rate, shortening the loan term, or tapping into the home’s equity.

Different refinancing options include, but are not limited to:

• Refinancing from an FHA mortgage to another type of mortgage.
• Refinancing from a 7-year adjustable-rate mortgage to a fixed loan.
• Changing from a 30-year fixed-rate loan to a 15-year fixed-rate mortgage.
• Lengthening or shortening the term of the loan.

Homeowners may refinance for various reasons, such as getting a lower interest rate, eliminating mortgage insurance fees, or tapping into their home’s equity.

To get approved for a refinance, you must still qualify like you did for the original loan. This means submitting a new application with a mortgage lender, going through the underwriting process, and evaluating your financial situation. Working with a trusted mortgage advisor who can help you understand your refinance goals and get the best deal possible on the transaction is essential.