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  Refinance Your Home in Gresham, OregonRefinancing simply means paying off your mortgage loan with another mortgage loan that carries a lower interest rate. For homeowners with mortgage rates that are 1.5 to 2.0 percent higher than current prevailing rates, refinancing can reduce their current monthly payments.
Some homeowners may refinance a home to switch into a different type of home loan. For example, homeowners with adjustable rate mortgages may refinance to get into a more stable fixed-rate mortgage, especially if interest rates are low.
For homeowners with mortgage rates that are 1.5-2.0% higher than current prevailing rates, refinancing can reduce their current monthly payments.
Some homeowners may also refinance to take cash out for home improvement, college education, car buying, and other purchases. They will refinance at a higher value to repay their existing mortgage loan and take cash out of their home equity for expenditures. An important note is that interest paid on your mortgage is typically tax deductible but interest on other loans and credit cards is not.
Is it Beneficial to Refinance?
Whether or not it's beneficial for you to refinance will depend on prevailing interest rates, costs to refinance, the expected length of stay in your home, among other factors.
Refinance vs. Home EquityHow about using the existing equity in your home to pay off your mortgage? Let's illustrate an example.
Say your existing home has an estimated market value of $250,000 and the amount remaining on your first mortgage loan is $150,000.
Instead of refinancing and paying all of those up-front closing costs, how about doing something like this:
You will find that most lenders charge zero closing costs with minimal hassle for most home equity lines of credit. You simply apply for a home equity loan with a participating lender and instruct the lender to use the equity in your home to pay off your mortgage.
Note that interest rates at 80 percent LTV or lower for large borrowing amounts come with very attractive rates. And many lenders offer up to 15-, 20- and, in some cases, 30-year repayment plans.
You can even use your excess home equity to:
Remodel your home
Finance a new car, truck or recreational vehicle
Consolidate your loans
Send your child to college
Unlike traditional refinancing programs where you pay a lot to refinance your home, using the equity in your home to pay off your mortgage saves you most of the up-front mortgage refinancing costs.
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