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What does it mean to refinance? How is it going to help me get a lower monthly payment?
When you refinance your home, you’re taking out a new loan with new terms. You’ll need a loan that meets one or more of the following criteria to lower your monthly payment:
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Private Mortgage Insurance (PMI) is no longer required – If you put less than 20% down on your home, you almost certainly have to pay private mortgage insurance (PMI). You can refinance to get rid of this expensive monthly payment if the value of your home has increased and/or you have enough equity.
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Refinance to a Longer-Term Loan – Refinance to a longer-term loan. You stretch the amount you owe over a longer period of time when you refinance to a longer-term loan. While you will pay more interest in the long run, your monthly payment will be lower.
