| You should be clear about your refinancing goal because refinancing can change a number of things about your mortgage (e.g., monthly payments, risk of changing payments with interest rate changes, time to repay your mortgage). It is important to know your reason(s) to refinance so that you can decide if the changes will achieve your goal.
For example, if you want to reduce your monthly payments, there are a number of options for this. Some ways, such as extending your repayment period with a new mortgage, may actually increase your total interest costs, even though they reduce your monthly payments.
As another example, you can often reduce your interest costs by getting a shorter term loan (like a 15 year mortgage). But 15 year mortgages have higher monthly payments than 30 year mortgages-again a tradeoff.
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he most common reason to refinance is to take advantage of lower interest rates and thereby save on mortgage costs.
