If you’ve been paying off your home for a while, you may be interested in refinancing your mortgage. Mortgage refinancing gives homeowners the opportunity to tap into the equity they’ve built up and use it in a way to positively change loan conditions or invest back into the property itself.
What is mortgage refinancing?
When you replace your old home loan by paying it off with a new one, you refinance your mortgage. Benefits include switching insurance rates (Example: from an adjustable rate to a fixed rate), shorten the term of the loan or even decrease the loan interest rate.
In addition to home improvements, with cash out refinance, you can turn your built-up equity into cash.
Find out how much equity you have in your home
Speaking with your mortgage lender, you can check how much equity you’ve built up on your home. This amount is made of the money you’ve paid back towards the balance of the property.
For example, if the value of your home is $400,000, and you owe $300,000, you would have $100,000 of equity.
Prepare your documents and apply
Once you’re ready for a mortgage refinance, you’ll need to gather documents to apply. These documents include, but are not limited to:
- Tax statements.
- Salary info.
- Copy of homeowners insurance policy.
- Etc.
Once all needed signatures and loan conditions are met, you’re given a cooling-off period of 3 days to retract your mortgage refinance request. In this case, you would just continue making your normal monthly payments on your original mortgage.
Refinancing your mortgage is a huge step, so consider taking your time to weigh out the pros and cons.
About the Author
Jodie Franklin
I love helping people find their dream home or sell their house in order to achieve their next goals. I have been working hard for my clients for over 18 years throughout southeast Michigan. I have experienced every kind of transaction there is.
Helping my community and being involved is extremely important to me. I am Past President of the Michigan Ability Partners board, which helps Veterans and people with disabilities reach independent, self-supported, and satisfying lives. I have also been a member of the City of Milan Tax Review Board and Zoning Board, and involved in Milan Main Street. I have been a major sponsor of events for Michigan Ability Partners, Aid in Milan, Milan Main Street, and many more organizations that work to make our communities better.
I was 2018 President of the Ann Arbor Area Board of Realtors, Realtor of the year in 2016 for AAABOR and nominee for Michigan Realtor of the Year. I serve on many committees with the local board, state board and was a member of the Housing Opportunity Committee for the National Association of Realtors (2018-19). I am currently serving my second term as a Michigan Realtors Board of Directors.
I have liked in Milan for over 20 years and enjoy living here with my husband Cliff, son Evan, and dog Rosie.