Benefits to Refinancing by Reese Evans

There are a number of benefits to refinancing. There are many reasons why you should refinance but just as many why you should not. While there are some situations where re-financing is not the right decision, some reasons to refinance include lower monthly payments, debt consolidation and cashing out some of the existing equity in the home. Before you refinance, weigh the pros and cons to determine if your situation is right for refinancing. The benefits to refinancing change for each person.

Debt Consolidation If you have a lot of high interest credit cards, refinancing to consolidate that debt may be a wise decision. If you have some equity in your home you may be able to refinance, pay off the existing loan and also pay off your credit card debt and perhaps car loans or other loans that you have. Because the loan is stretched out over a longer period of time, the monthly payments are lower than the total of the individual payments.

Lower Monthly Payments For those of us living paycheck to paycheck the idea of a lower monthly mortgage payment is exciting. One of the main reasons someone refinances their home is to get a lower interest rate. This will likely reduce the monthly payments and give more cash flow.

Cash Out Another popular reason for re-financing is to use the existing equity in the home. If you have a lot of equity in your home, you can refinance and take some of the money out for other purposes. You may want to make some improvements to your home, buy a car, start a business or take a vacation, among other things. When you use your equity for a cash out you can use that money however you'd like.

Shorter Loan Period If you have the cash flow, refinancing your mortgage to a shorter-term can save thousands of dollars over the life of the loan. You are paying more money each month, therefore more money is going to your principal which pays the loan down faster.

There are other benefits to refinancing that may fit your situation. The most important thing you need to do is educate yourself about the process. Get In The Know now about the benefits to home refinancing. Get information about buying and selling homes, different mortgage types and other real estate information at Real Estate - Get In The Know

About the Author

Reese Evans continues to do research on real estate issues such as refinancing. She writes articles of interest at www.real-estate-in-the-know.biz.

Other articles include: Do You Need To Refinance To Stop Foreclosure