A mortgage refinance is a new loan that replaces the one you have — ideally, with a lower rate and/or better terms. It’s swapping one mortgage out for a new one. You’ll go through the same application process, where the lender checks your credit, verifies your income and confirms employment.
Why Refinance?
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If rates dropped since you took out your mortgage, you may be able to refinance to a lower rate and lower your monthly payment.
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If you have an adjustable rate mortgage (ARM) and plan to stay in your home for a while, you may want to refinance to a fixed rate mortgage saving you in the long run.
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If your home value increased or you paid off a significant amount of your mortgage, you can get cash out of your home with a cash-out refinance to pay off credit card or other debt, make home improvements and more!