Refinancing your mortgage means getting a new loan to pay off your existing loan.

Depending on your current financial or personal situation, there are many good reasons to refinance. Based on the type of loan you choose, there are a lot of great benefits too.

 
 
 

Refinancing can get you a better mortgage.

Get a lower interest rate: A lower rate often results in lower mortgage payments. You can use the extra money each month to pay off debt, for savings or investments, or to spend however you like.

Get a shorter term: You may end up with a comparable, or slightly higher, monthly payment, but with a shorter term you’ll pay off your loan sooner. You’ll save a ton of money over time by paying less toward interest, and you’ll build equity faster, increasing your net worth.

Switch from an adjustable to a stable fixed rate loan: Switching from an adjustable rate mortgage (ARM) to a fixed rate loan gives you predictable monthly payments over the life of the loan. You won’t experience dramatic monthly payment increases, making long-term budget planning easier.

Turn your home’s equity into cash: Cash-out refinancing turns the equity in your home into cash. From paying off high-interest credit cards to taking a dream vacation, there are no restrictions to how you use the money. And there are no tax penalties for accessing or using this money.

 
 
 

Should I refinance?

If your current mortgage meets one or more of these conditions below, it’s a good time to consider refinancing.

 
 
 

Increased home value

If conditions in your local housing market have increased your home’s value, your equity went up, too. With high equity you could get a new loan on better terms. Or you can convert that equity into cash to use however you like.

Interest rates are low

As a general rule, if you can get an interest rate at least half a percent lower than what you’re currently paying, it’s good idea to consider refinancing. If you can get more than a percent, it’s a great idea. A lower rate could get you a shorter term, lower monthly payments, savings over the life of the loan – maybe even all three.

Your current mortgage is relatively new

In the early part of many mortgages, most of the monthly payment goes toward interest. If you can get a new mortgage that applies more of your payments toward principle, that’s good. You’ll build equity faster. It’s like paying money to yourself.

 
 
Bill Black and his team have helped me secure multiple refinancing on jumbo loans on luxury housing in Dallas. Bill has always been pro-active, very responsive, and has helped find me some great deals. I appreciate all the money he has saved me and his great customer service.
— Brian H., Home Owner, Dallas, TX