Mortgage refinancing: Should you do it?

Factors to consider before you refinance

When considering refinancing your mortgage, it is critical to approach it holistically to figure out if it is the best option for you. Consider the following:

Make a financial assessment. Assess your short-term and long-term financial goals and decide what the potential cost of refinancing your mortgage will be. Prior to refinancing your mortgage, it is crucial to understand your current financial situation well.

Understand mortgage refinance. Now that you have made a financial assessment and understand your financial situation, it is important to understand exactly what it means to refinance your mortgage and understand thoroughly how it works. When refinancing your mortgage, you do not want to run into any surprises along the way.

Off the top, it is important to recognize that there are pros and cons to refinancing your mortgage. Among the cons are that you will sustain closing costs, so you will have to be sure to account for added expenses and other potential risks when figuring out whether or not refinancing makes the right financial sense for you. This is especially important if you want to sell any time soon.

Use a mortgage refinance calculator. Utilizing a mortgage refinance calculator will give you a pretty good idea of how refinancing may impact your monthly payments. The way a mortgage refinance calculator works is that you input your basic info—such as your current mortgage, your financial goals, your credit score, where you are located, etc.—to figure out what your payment might look like.