Reasons for Refinancing a Home


The reasons for refinancing a home are many and varied. Refinancing involves the rearrangement of the original loan terms in order to accomplish a certain goal.

The vast majority of mortgages are entered into with no thoughts of refinancing. But certain circumstances may necessitate a change in the original arrangements.

Changing Mortgage Terms

Some of the more common reasons for refinancing include extended mortgage terms, which usually means lower monthly payments. Simultaneously, you can get shorter mortgage terms in order to save in interest costs.

Refinancing a house also allows you to obtain additional cash for renovation or expansion. Or to change between a fixed rate and an adjustable rate mortgage, you can refinance as well.

Refinancing a Home Due to Life Changes

Unfortunately, changing life circumstances can make it difficult to keep up with mortgage payments. A decline in income or an increase in overall expenses both impact your ability to pay for a mortgage.

That doesn’t mean you have to let the mortgage go bad, rack up late fees, or lower your credit score. It may be best to consider refinancing a home.

When you refinance, the original mortgage is essentially rewritten. This allows you to extend the mortgage term so that the monthly payments are lower and therefore more affordable.

On the other hand, increasing income may also make it possible for a mortgager to make bigger monthly payments and to pay off their mortgage in a shorter period of time.

While this does not necessarily require refinancing, if you make this adjustment, the interest rates offered may be lower. In this case, you can pay the mortgage off faster while the total interest charges will be less.

Refinancing is an excellent option if you have lots of free equity in your home and need extra cash to make home improvements or to expand. Also, if it becomes beneficial to switch between a fixed rate and an adjustable rate mortgage throughout the life of the mortgage, then refinancing may be the best way to do so.

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As a blog writer, Jessica gets to mix her passion for creative writing with her love for helping others. As native California resident, she shares her free time with Disneyland, outdoor adventures, and her dog.


  1. I’ve been trying to find a mortgage company that would refinance my manufactured home and land.
    Im paying 11.88% interest which is crazy. I’m wanting to lower interest, continue to pay same mortgage punts so I can pay off mortgage earlier.

  2. I’m a first time home buyer,and I’m basically renting to own my property.I also realized that I will be paying way more than what the house is really worth,I’m worried and I really don’t no what to do..

  3. My house recently appraised for only 60,000 and I owe seventy-two thousand my interest rate is 6.25 I want to lower it but no one will help

    • Hi Daniel,

      Have you checked to see if you qualify for HARP? Here are some of the eligibility requirements:

      1. You are current on your mortgage, with no 30-day+ late payments in the last six months and no more than one in the past 12 months
      2. Your home is your primary residence, a 1-unit second home or a 1- to 4-unit investment property.
      3. Your loan is owned by Freddie Mac or Fannie Mae. You can use the Loan Look-up Tools below if you are unsure.
      4. Your loan was originated on or before May 31, 2009. By using the loan look-up tools below, this date will be made available to you.
      5. Your current loan-to-value (LTV) ratio must be greater than 80%. Calculate your LTV ratio with this tool:

      6. Is your mortgage owned by Fannie Mae or Freddie Mac?
      Use their online tools to quickly find out, or call them toll-free:

      Fannie Mae
      Loan Look-up Tool:
      Call: 800-7FANNIE (8 am to 8 pm ET)

      Freddie Mac
      Loan Look-up Tool:
      Call: 800-FREDDIE (8 am to 8 pm ET)

      Be sure and check your address on both the Fannie Mae and Freddie Mac look-up tool. If your address does not appear in the look-up tool of either site, your loan is not owned by Fannie Mae or Freddie Mac and you are not eligible for the program.

      If you believe you qualify and you’ve applied before but were turned down, I would recommend trying again. HARP has been significantly enhanced since it launched in 2009. The program now requires less documentation and has simpler guidelines, all designed to approve more loans.

      For more information, visit their official site:

  4. Well looks like you can’t help me behind on mortgage because of pay decrease and bank won’t work with me tryed for a loan modification got turned down

  5. James, I understand, as I am in the same boat! I lost my good STATE job and struggled to make payments, because of the way money came in, it made payments late. Nobody wants to help so far so I am on the verge of loosing my home of over 20yrs!!!!!


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