We all want to reduce our bills, pay less per month and save more money for us. Refinancing your mortgage could be one way for you to free up some money. There are many reasons why homeowners refinance: to obtain a lower interest rate; to shorten the term of their mortgage; to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; to tap into home equity to finance a large purchase, or to consolidate debt.
Refinancing can cost between 3% and 5% of a loan's principal since it requires an appraisal, title search, and application fees, just like a mortgage would. Because of this it is important for a homeowner to determine whether refinancing is a wise financial decision before starting the process.
