The passion for home equity loan
Selling your home before you break even on the refinance will end up costing you more money than if you never refinanced your first mortgage. Another common scenario is when the homeowner has an adjustable rate mortgage (ARM) and the interest rate on that mortgage "re sets" to a higher rate. If you think mortgage rates will continue to increase, replacing your adjustable rate with a new fixed rate mortgage will keep you from paying higher interest costs when the rates go up. If you think rates are likely to go down in the long term, it may be smarter to refinance into a new adjustable rate mortgage. Homeowners who find they are unable to make their current mortgage payments may opt for mortgage refinancing as a way to extend the term of the loan and thereby lower their monthly mortgage payments.