Refinancing your home can be done for a number of reasons: to reduce your monthly payments, to take cash out on the home for other purchases or to lower your interest rates. If you're on the fence there are a things to know before you refinance.
What is my credit score?
A credit score is important when financing your loan. Your credit score can have an influence on how much your monthly payment will be. For borrowers with a good credit history, refinancing can be a good option. However, if you've got poor credit, refinancing may be risky.
Am I prepared for the risks?
You also need to be aware of the risks that come with refinancing. You can receive penalities as a result of paying down your exisiting motrgage with your line of home equity credit.
How long do you plan on staying put?
You need to weigh out the financial benefits of refinancing. If you think you might move in the distant future, it may not make sense to refinance.