Mortgage Refinance Loans - Do You Need Them? # 1. Bring Down Your Monthly Credit Payment with Mortgage Refinance If your objective is to stay in your home for a number of years, it probably makes good sense to look at home refinance loans that allow you to pay a point or two to bring down your interest rate and overall mortgage payment. Over a few years, your monthly savings will pay for the cost of the house refinance because of your monthly savings and your lower monthly mortgage payment. However, if your objective is to move in the next few years, you may never recover the cost of refinancing because you will not be in your home long enough. Before you decide to look at home refinance loans, you should calculate the point at which you break even so you can determine if a mortgage refinance makes sense. # 2. Mortgage Refinance Loans Can Move You From an Adjustable Rate Mortgage (ARM) to a Fixed Rate Mortgage For homeowners who are willing to risk upward market fluctuations with home refinance, adjustable rate mortgages (ARM's) can offer much lower initial monthly payments. In addition, home refinance loans that offer adjustable rate mortgages can also be ideal if you only plan to own your home for a few years because the rate cannot fluctuate very much in that time. But, if you plan to stay in your home a long time, you should consider a mortgage refinance to switch out your adjustable rate mortgage for a fixed rate long term mortgage ( 15, 20, or 30 years). You may have a higher interest rate than with an adjustable rate mortgage, but you will have the peace of mind of knowing that your monthly house payment will not be going up. # 3. Break Free from Balloon Payment Programs Home refinance loan programs that have a balloon payment are great when you want lower interest rates and a lower initial monthly payment, just like adjustable rate mortgage refinancing programs. Nevertheless, the whole balance of your mortgage refinance is due to the mortgage company if you still own the property at the end of the balloon payment term (often 5 or 7 years). You can easily change over into an adjustable rate mortgage or a fixed rate mortgage if you are in a balloon program now. # 4. Get Rid of Private Mortgage Refinance Insurance (PMI) Low down payment mortgage refinancing loan options allow homeowners access to home refinance loans with less than 20% down. Sadly, these mortgage refinance loans also usually require that you pay for private mortgage insurance, which is designed to safeguard the mortgage company from loan losses. You may be eligible to remove your PMI through mortgage refinance loans because as the value of your home goes up and the balance on your home goes down. # 5. Tap Your Home's Equity if You Need Extra Cash Your house is a great place to look for extra cash when you need it. Like most homeowners, your house has probably gone up in value and that gives you the facility to withdraw some of that money and put it to use as you need to. Pay off tuition, credit cards, make home improvements, buy a new car, or even pay for your daughter's wedding. With a cash-out mortgage refinance, it's fast, simple and even tax deductible. Moving from an adjustable rate mortgage to a fixed
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