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

If you are refinancing your mortgage, you can use Quicken Loans ‘s Financial Calculator to estimate your monthly payments and interest. If you are planning to refinance, use the following tool to select a refinancing company recommended by the state where you live.

What are the benefits of refinancing?

Saving money: The reason for refinancing is to save interest. Usually, refinancing can lower the existing interest rate, especially for long-term or large loans, which can save a lot of money. For example, if your current mortgage interest rate is 7%, you may be able to get a lower mortgage interest rate after refinancing, such as 4% or 5%, and you can repay the mortgage with a lower interest rate.

Lower payments: Refinance can help you lower your monthly payments, and when you apply for a refinance, you can restart the “loan clock” and extend the time it takes to repay the loan to lower your monthly payments. For example: Your current mortgage interest rate is 7%, and it is renewed for 30 years. If you decide to apply for a refinance in the 10th year, you may not only get a lower interest rate, but also restart your mortgage from 30 years.

Shorten the loan term: If you don’t want to extend the payment time, you can also shorten your loan term through refinancing. For example, refinance a 30-year mortgage to a 15-year mortgage and repay the loan with a lower interest rate.

Consolidate debt: If you have multiple loans, consolidating them into one loan can help you lower your interest rate, and the combined payments are easier to repay. For example, if you currently have three credit cards with different interest rates, you can apply to consolidate the debts of the three credit cards and pay them together. The advantage of this is that you are likely to get a lower interest rate and you don’t have to pay separately.

Change your loan type: If you use a floating rate loan, you can change it to a fixed rate loan through Refinancing. For example, when the economy is bad, the floating rate in the market is high. At this time, if you start a fixed rate (usually between 4% and 5%) through Refinancing, it will help the borrower save a lot of interest.

Pay off your debts when they are due: Some debts must be paid back within a certain period of time, but if you don’t have a large sum of money to pay all at once, you can buy yourself more time to pay off your debts by refinancing.