Just as you can with a student loan, auto loan, or credit card debt, you can also refinance (i.e., pay off a loan and replace it with a new one) a mortgage. There are several unique reasons to do so, but mortgage refinancing is mainly classified as two types: rate-and-term refinance and cash-out refinance.
If you’re tired of your high monthly mortgage payments, now is the perfect time to refinance. Whether you want to take advantage of low market rates or have experienced a boost to your credit standing, you can potentially save a lot of money on your monthly payments by refinancing to a lower APR (annual percentage rate). And with the economy bouncing back in the wake of the pandemic, interest rates could start rising at any time.
For many Americans with dreams of buying a home, certain financial hurdles can make it seem impossible. For example, many cannot afford to cover high down payments or simply don’t have the credit profile that lenders are looking for in a mortgage applicant.