What Are The Different Types of Refinancing? When Should I Consider A Refinance? – Stress Free Mortgage

There are two different types of refinancing, so which one makes the most sense for you? The refinance people think of the most often is called a Rate/Term Refinance, which will lower your interest rate and payment. The other option is called a Cash Out Refinance, where you can choose to take cash out of your equity. People may use this for anything, but it is most used for home renovations or to pay off debts.
There is no specific number or rate you should be looking for when deciding if it’s the right time for you to refinance. Ultimately, it comes down to how much you are saving versus how much you are paying to refinance, and how long it takes to make up the cost. When interest rates are declining, as they are currently, there is a chance you may not catch the lowest rate the first time you refinance, but you can typically go through the process again in 6 months. Often, it is better to refinance when you have enough savings and less cost.
Also, if you have outstanding credit card debt, you can refinance to help pay it off! Today, most interest rates for credit cards range from 15% to 25%. With these numbers in mind, refinancing at a rate of approximately 6% will benefit you financially. Refinancing would allow your overall debt to decrease and could even get your mortgage paid off faster.
If you are thinking of refinancing for any of the reasons listed above, reach out to Stress Free Mortgage for more information! Call: 661-295-0555.