Thinking of Refinancing? Some Things to Keep in Mind

[David G. Barton]

Although interest rates are predicted to rise in 2022, the mortgage market has already seen major fluctuations. So, if you're watching the rates with refinancing in mind -- either to lower your payments or tap into your home's equity -- here are some things to consider.

• A rate/term refinance can lower your loan's rate, change its term, or both. For example, if your income's increased over the past years, you can apply to refinance to a shorter loan term. This provides major savings by lowering your loan's total interest.
• In addition to shortening your loan's term, if you prefer to keep more of your take-home, you may be able to refinance to a longer term.
• Thinking of tapping into your home's equity with a cash-out refinance? Ask to compare your refinance costs with a home equity line of credit (HELOC). Both are smart options for financing anything from a major remodel to a new vehicle, as they can save you money with their lower interest rates.