Rate Refi

Lowering your interest rate can save you thousands of dollars over the life of the loan. Make sure to set clear short-term and long-term goals before moving forward.

Why do you want to refinance? Lowering your payment is typically the goal, and while attractive – that typically means starting over on another 30-year mortgage. That may makes sense for some, as can be in the case of debt-consolidation. But that is not always true either, and you’ll want to consider your specific situation.

Lowering the interest rate on your loan also means less of a tax deduction for interest paid on your primary residence, and you may want to speak to a tax adviser on how this could affect you.

But for most, cash-flow is key. And for that reason lowering the overall interest rate of the loan is a game-changer for most homeowners considering refinancing. However, there can be cases where refinancing can lower the overall monthly payment without reducing the interest rate of the loan.

A good example of that would be if you currently had an FHA loan with mortgage insurance. If you qualified to refinance your loan with a conventional mortgage you could potentially remove the PMI requirement. In that case you may pay a higher interest rate, but the removal of PMI should reduce your overall monthly payment.