What is a Refinance Loan?

A refinance loan is used to replace an existing loan with a new loan which usually features a lower interest rate. Additionally, many homeowners use the refinance process to access cash from available home equity. If your home has available equity, you may be able to use your equity to consolidate higher interest rate debts into a lower interest rate refinance loan. Borrowers often realize that they can reduce their payment of interest expenses by consolidating higher interest rate credit cards and other unsecured loans into a lower interest rate home refinance loan.

You may want to consider mortgage refinance* if:

• The interest rates have decreased enough since you first bought your home that the benefits of a lower interest rate exceed the costs of refinancing.
• You want to change the terms of your mortgage – from adjustable rate to fixed or from fixed rate to adjustable
• You can afford a larger monthly payment and want to build equity faster by refinancing to a 15-year mortgage from a 30-year loan and receive a lower interest rate.
• You want to access the available equity in your home to fund a remodeling project
• You want to consolidate high-interest rate consumer debt with a lower interest refinance loan
• Your credit has improved since you purchased your home and you qualify for a better loan and lower interest rate.

Before you decide to refinance:

1. Decide what you want to accomplish by refinancing.

   Some homeowners refinance to lock in a lower rate, others refinance to get cash for planned expenses or for changing mortgage terms. Determine the purpose of your refinance before you start shopping for a loan.

2. Review your financial picture.

   Once you’ve determined your loan purpose, review your financial picture and evaluate your finances. Decide how much payment you can reasonably afford. Remember, refinancing might increase your monthly payments – especially if it involves consolidating other debt into your refinance loan package.

3. Research the mortgage lenders.

   Look for reputable lenders who offer a range of refinance loan options. Beware of anyone who encourages you to lie on your application or pressures you to borrow more than you need.

Want to learn more about refinance loans?

Call Countrywide Home Loans and talk to one of our experienced loan consultants. The call is FREE and there is no obligation. Call us today at 1-888-284-7596.

*Refinancing may increase the total number of monthly payments and the total amount paid when compared to your current situation. Loan consolidation may result in an increased loan-to-value (LTV) ratio for which mortgage insurance may be required.