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What to know about refinancing a mortgage

Posted on Thursday, January 9, 2014 at 10:03:00 AM

The number of homeowners seeking residential financing is on the rise. This option is often popular with many different people, and looking at the benefits, it is easy to see why.

The main reason people choose to refinance is for a lower interest rate, according to Bankrate.com. One of the greatest impediments to this goal is a lack of home value, but as prices rise, now may be a good time to make a move. In addition to lower rates, some borrowers want to switch from an adjustable-rate mortgage to a fixed one. Refinancing can do that, even if the rate isn't much better. Most importantly, it will be more stable.

There are a number of benefits to going the refinancing route on residential financing. According to ShopRate.com, it can even combine mortgage loans saving a person money in the long term. A home-equity loan might have a higher rate than the first mortgage, and that could be changed so minimum payments drop. 

In today's housing market, more stable conditions, better home values and rising mortgage rates may have some people thinking about refinancing. Given all of the positives, it could be smart idea.