There is a lot to consider when refinancing your home. Austin Community College District (ACC) experts share tips on what you should know before taking the next step.

Written by: Job Hammond, ACC Real Estate Professor

Published article in MoneyGeek

Expert Insight on Mortgage Refinancing

What questions do homeowners need to consider before refinancing?

Refinancing your mortgage is a financial process where you replace your existing mortgage with a new one. Homeowners should consider their financial objectives, which may include lowering the interest rate, reducing the term, reducing monthly payments or cashing out the equity in the house for expenses. Homeowners should consider their current interest rate, how long they plan to live in the house and the costs associated with the refinance before making this decision. Most homeowners who have purchased their home over the past decade have fixed-interest mortgages below 5% and may struggle to justify refinancing at current rates.

What should homeowners look for when comparing refinance offers?

Homeowners should consider multiple factors, including the interest rate, closing costs and the type and length of the mortgage when considering a mortgage refinance. Pay particular attention to the annual percentage rate (APR), which includes both the interest rate and fees, to help compare various offerings. Research the history and background of any potential lender to protect yourself from refinance scams. When used responsibly, refinancing your mortgage can lead to lower monthly payments, better interest rates and an improved financial situation that can benefit you in the long run.

Tags: ACC Experts, Money Geek, Mortgage, Mortgage Refinancing, Real Estate