Refinance

People refinance their existing mortgage for a variety of reasons. Get a better rate. Leverage the accumulated appreciation in their home. Pull out money to use for home improvements, college, a small business… whatever. The point is, refinancing can be a good financial tool to save money, or to do more things with your money.

Basically, there are two types of refinance: cash-out and rate-and-term.

Cash-out. Want to pocket the difference between your old mortgage and your refinanced mortgage? An example would be: Let's say your original mortgage was $100,000. You used it to buy a $110,000 home. In four years, you've paid down the mortgage by $5,000 ($95,000 remaining), and the home has increased in value by 24 percent (+$26,400) and is now worth $136,400. You get a refinanced mortgage of $122,760. With the retirement of what's left of the original mortgage, you suddenly have $27,760 in your pocket ($122,760-$95,000)! Cha-ching!

Rate-and-term. Want to take advantage of a lower rate? Want to change the index with which your adjustable is tied? Want to manage your money differently? A mortgage that might have been a perfect fit years ago, now doesn't fit so well. A refinanced mortgage can be a great way to get re-fitted. And you'll look marvelous.

Streamline refinance. Got a mortgage recently? Things change already? Either with you, or the market? A recent mortgage can likely be refinanced without a lot of paperwork hassle. Contact your loan officer. Sign. Done.