How to Refinance in the United States in 2024 Mortgage Knowledge: Lowering interest rates, cost analysis, improving existing loans, and increasing cash positions

The year before last, Xiaomei bought her first luxury house for USD 1 million. She paid a down payment of USD 100,000 and applied for a mortgage loan for the remaining balance over a period of 30 years. However, because Xiaomei’s credit was so bad, the bank gave her a repayment interest rate of 6.5%. This year, Xiaomei’s credit has greatly improved. If you were Xiaomei, would you continue to pay off the mortgage at an interest rate of 6.5%, or would you apply for  a “Refinance” to lower the interest rate and pay off the 30-year mortgage again?

It seems that more and more people are buying houses these days. If you don’t know how to apply for a loan or refinance at this time, wouldn’t you be at a disadvantage? With mortgage interest rates so high, do you want to lower the interest rate to give yourself a break? What exactly is refinancing? Is your situation suitable for refinancing? Don’t worry, after reading this refinancing guide, you can become a little expert in the financial industry even if you are not a CPA!

What is Refinancing?

Refinance means “repaying an existing loan with a new loan”. The new loan may have a lower interest rate, which can not only help you improve your financial situation, but also improve your loan capacity. The process is usually as follows:

1. You want to lower your interest and improve your existing loan
2. Find a good lender (bank) and apply for a new loan
3. Use new loans to pay off existing debts
4. Make your new loan payments on time until you pay off your loan

How to apply for refinancing? Which refinancing company is better in the United States?

Applying for a refinance is like buying vegetables at the market. You must compare prices from three different lenders. First, understand your credit rating. Even if your credit score is high, other lenders may offer you better prices and interest rates. You can tell the lender to give you a quote before applying, and then look around for more favorable terms. But remember not to apply for refinances from different lenders at the same time  , because this will not only lower your credit rating, but also increase your loan interest rates in the future.