Refinancing

Refinancing may be right for you if you need to borrow a larger sum of money. With refinancing, you pay off your current mortgage loan with the proceeds from a new loan. Consider refinancing when you can gain a lower interest rate, shorten the term of your loan, or want to get cash out of your property's equity.

Refinancing that includes additional cash is called a cash out. The cash obtained can be used to make major purchases such as automobiles, home improvements, and college tuition. With refinancing, it's possible to achieve a lower monthly payment and interest rate even when you do a cash out.

Refinancing may be right for you if:

• You want to repay your loan over a shorter period of time, which potentially reduces the total amount of interest paid.

• You currently have an adjustable-rate mortgage and anticipate an increase in rates in the future. Depending on current rates, your payments may be reduced by refinancing into a new adjustable- or fixed-rate mortgage.

• You can wait a longer period before receiving funds.

• You want to increase your cash flow, and refinancing can reduce your current mortgage rate by one percent or more.