REFINANCE

Millions of homeowners took advantage of historically low interest rates the past few years. To achieve lower monthly payments these homeowners performed a refinance of their mortgages. Refinance is a growing and still-popular mortgage trend.

With refinance of the mortgage, some homeowners also took advantage of the appreciation in the value of their home. Effectively, they were able to cash in (take out) some of the equity in their home (based on appreciation), then lock in a lower interest rate and keep their payment the same. It has been a great deal, especially for many homeowners who find themselves in a cash crunch.

The downside of a refinance is that fees are involved. Accordingly, the economics of refinance is weighing the decrease in monthly payments versus the increase in fees. When interest rates fall significantly from the rate on your mortgage, it might be a good time to evaluate whether or not to refinance your mortgage.