With the recent lower interest rates, many homeowners are wondering if they should refinance. There are many reasons to refinance, but here are three of the most common ones:

  1. Lower your interest rate and payment. This is the most popular reason. If you have a 5% interest rate or higher, it might be worth checking out.

  2. Shorten the term of your loan. If you have a 30-year loan, it might be good to switch to a 15 year loan to pay off your mortgage faster.

  3. Cash-out refinance. With home prices increasing, you might have enough equity to cash out and invest in a rental property.

Think about how much longer you’d like to own your current home. If you plan to stay for more than 3 years, then refinancing may be a good idea. If, however, your current home does not meet your present needs, you might want to consider using your potential refinance costs for a down payment on a new move-up home.