Reasons to Refinance
Consumers refinance their mortgage loans for various reasons. You can refinance your existing loan to lower your interest rate, take cash out, consolidate credit card bills, pay off student loans, pay off medical bills or finance a new entrepreneurial endevor.
By far the most common reason for refinancing is to take cash out to pay off debts or to add a new kitchen, bathroom, deck, patio, pool or basement to a house.
Refinancing to Consolidate Debts
If you have over $10,000 or $20,000 in credit card debts and find it difficult to keep up with monthly payments, a debt consolidation refinance loan, allows you to take a cash lump sum, out of your home to pay off the entire balance of your credit card debt.
Aggregating all your bills together into one loan, relieves the stress of having to juggle multiple credit card payments and it also pays off a debt that often seems impossible to pay down. Lastly, you save money by eliminating high interest credit card debts.
Refinancing to repair or improve your home
Whether you are installing a new kitchen, a pool or fixing up the basement, homeowners choose to take cash out of their homes for reburbishment projects because it adds to the enjoyment of the house and it also increases the home's value. Many home buyers will make an offer on a house on sale because they fall in love with the kitchen or bathroom. It's a gut feeling.
If you plan wisely, you can regain every penny that you have put into a home improvement project and then some. The key is to understand what increases the value of a home and how far your improvements should go, considering, who a future buyer might be. All in all, you want the best of both worlds - something you can enjoy and something that helps your home to go up in value.
Finding the lowest refinance rate
Finding the lowest refinance loan rate is simple - you have to shop around. This kind of shopping should not cost you any money. You simply have to get refinance loan quotes and compare rates from several lenders. A reputable resource can offer refinance loan quotes without a credit check or social security number.
About the Author
Lisa Jones writes about finances with a special focus on consumer loan products.
