How refinancing affects your wealth.
If you’re considering refinancing your mortgage you should know that refinancing may not always be in your best interest. In fact, refinancing may negatively impact your ability to accumulate wealth. By refinancing late in your mortgage you may be restarting the amortization process. That means most of your monthly payment will go to paying interest again and less to paying down your principle, AND building equity in your home.
Refinancing can be expensive! And the monthly savings gained from lowering your monthly payments may not exceed the costs. (Typical costs associated with refinancing)
There may be options other than refinancing that could be more beneficial to you if you need to free up some cash. Like a Home Equity Loan or Home Equity Line of Credit.
Get the Facts. Talk to your mortgage servicer first and see if refinancing is right for you.