10 Best Mortgage Refinance Consumer Reports 2019 – Top Rated

The refinancing is intended to meet a debt through another loan under new terms. This type of financing is the most common among homeowners. Generally, it involves paying the existing mortgage and acquiring new debt. ”

Therefore, when you make a mortgage refinance you liquidate the mortgage loan you have and get a new one. You may consider refinancing your mortgage when: you find it difficult to make monthly payments, seek to lower interest or reduce the term of the loan, etc. Since by refinancing you could get a new interest rate, a shorter term or a more comfortable monthly payment.  

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Is it convenient to refinance?

Must be careful! Since refinancing your mortgage for a longer-term (more years) you can borrow more since, in the end, you would be paying more for interest.

For example, if you have a $ 200,000 mortgage with a 4.5% interest, the 30-month monthly payment would be $ 1,013. You will finish the loan in 2049, but you will pay more than $ 164,000 in interest during those years.

On the other hand, if you have a 20-year mortgage loan for the same amount ($ 200,000), the monthly payment will be $ 1,265, but you will end up paying much less in interest, $ 103,672. Therefore, if you reduce the time in which you would be paying the mortgage, to 20 years, you would save $ 60,328 and if you lower it to 15 years you would save approximately $ 88,603.

However, I must emphasize that by decreasing the number of years you would be paying the mortgage, the monthly payment would rise quite a lot. Because of this, you have to put the benefits and disadvantages on a balance and decide what is best for you: pay more money monthly to pay off debt faster and save on interest or pay less monthly and in the end pay more on interest.

Some benefits you can get by refinancing:

  • Reduce monthly payment or interest rate

By refinancing you could reduce the monthly payment of your mortgage, since the time in which you would be paying the loan could increase, thus lowering the monthly payment. For example, if you currently pay $ 2,800 for your home monthly for a period of 15 years, by refinancing and increasing the term to 30 years your monthly payment could go down.

  • Reduce or increase the duration of the mortgage.

You can reduce or increase the term in which you would be paying the mortgage at your convenience. For example, if you want to lower the monthly payment you could increase the term for a few more years. On the other hand, if you want to pay off your mortgage faster and lower interest rates, you can reduce the years.

  • Get cash from accumulated capital

By refinancing you can receive a cash payment if you do so for an amount greater than what you owe. For example, if you owe $ 100,000 of the mortgage and you finance $ 120,000, you could receive the difference, $ 20,000 in cash. This option is convenient if you need money to pay debts or remodel your home.  

Cost of refinancing

Refinancing is not free, to do so you could pay for: application, opening charges, charges for inspecting the home, charges for assessing the value of the house, etc.

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