Depending on the type of refinance you get, your new loan could end up costing you more money in the long run than if you had kept your original loan. This can happen when extending the term of your loan, as you're extending the amount of time you'll spend paying interest. The most immediate benefit of refinancing is that it helps cash-strapped borrowers find space within their monthly budget. This could be advantageous if you expect your cost of living to rise (perhaps you are going to have a baby) or if your income has fallen (due to loss of employment or reduced hours of work).
Many experts agree that if refinancing your mortgage can help you save at least 1%, it may be worth all the paperwork and additional charges. Here's how refinancing a mortgage works, the common options available, and the advantages and disadvantages to consider. Getting quotes from at least three mortgage lenders can help you maximize your savings when refinancing a mortgage. Refinancing a mortgage usually takes as long as buying a home, with an average of 30 to 45 days.
Finally, even if only temporary, refinancing your mortgage could have a negative impact on your credit rating, as the lender will conduct extensive research to assess your creditworthiness. One of the obvious advantages of refinancing your mortgage is that you could get a lower interest rate which, in turn, would lower your payment monthly.