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How often can you refinance your mortgage?

Refinancing a mortgage allows you to pay off an existing debt on a home with a new loan with different terms and features. The short answer to the question of how frequently you can refinance your mortgage is simple: You can refinance as often as lenders are willing to approve a new loan based on their guidelines. Discussing your options with a Licensed Lending Officer at (888) 983-3270, is a great way to begin.

It is not always advisable or beneficial to refinance numerous times as each time the fees might end up outweighing the benefits if done too often. So before making the decision to refinance, weigh all factors carefully, as they could cost you.

What is the goal of the refinance?

When deciding if you should refinance, be clear on why you want to do so. Depending on the circumstances, the reasons to refinance can include:

  • A lower interest rate which can result in the loan being less expensive on a monthly basis
  • Modified terms, which will allow you to shorten or extend the amount of time to repay the loan
  • Reducing your monthly mortgage payments with a lower interest rate or longer terms to increase cash flow
  • Fast access to cash, which you can use to pay down debt, remodel, or use for other needs
  • Switch from an adjustable-rate mortgage (ARM) to a fixed, or vice-versa

Change in terms

Shortening or lengthening the length of your loan might be advantageous at this time. Perhaps when you bought your home, you were doing well financially and opted for a 15-year-fixed loan so you could pay your house off as quickly as possible. For example, you may have experienced an illness in the family or other unforeseen circumstances and you need to refinance to a 30-year ARM in order to get relief on your monthly bills.

Access cash

Cash-out refinance loans are beneficial when you have equity in your property and need to access the funds. You can use the money for many reasons, including remodeling, consolidating debt, a down payment on a second home, college tuition, etc. This should be a strong ‘pro’ because chances are the interest you would pay on your cash-out refinance or home equity loan will be a lower interest rate compared to interest rates for credit cards, cash advances or other means of accessing cash.

Lower your interest rate

A look back to interest rates from 10 years ago and it is clear that they have fallen significantly. This can provide a significant amount of savings to homeowners, giving them a good reason to refinance. If you refinance into a lower-rate loan, you could save a significant amount of money on monthly payments and reduce the overall cost to pay off your mortgage.

Short- vs. long-term benefits

Before making the decision to refinance, work closely with a lender to determine the affordability of a new loan. Since credit scores, home values, and other customized data need to be taken into consideration before you can determine the financial benefit of refinancing, a personalized quote is best. It is important to get an estimate of the closing costs. Knowing these numbers can be key to deciding the overall benefit of your refinance.

The good news is current interest rates are historically low, providing homeowners with an incredible opportunity to secure a low-cost mortgage refinance. Additionally, if you just want to pull cash out for home renovations, you can also do so. Home values are on the rise, resulting in higher home equity and giving you more power and ability to refinance. Speak with a Licensed Lending Officer at (888) 983-3270 or click here for more information.

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