Should I Refinance My Home Loan if I Only Plan on Living There for a Few Years?
Many first time home owners consider refinancing their mortgage. Refinancing a mortgage consists of paying off the current mortgage and replacing it. Homeowners often take this route to lower their interest rates, shorten mortgage terms, consolidate debt, etc. Refinancing your mortgage is a great opportunity to save money long term.
While there are many benefits to refinancing a mortgage, it is important to consider how long you intend to live in your current home. If you are only planning to live in your home for a few years, you won’t benefit from refinancing. The costs of refinancing will cancel out any potential savings. Furthermore, cashing out of your equity does not fulfill the purposes of refinancing. You are still required to pay any fees associated with the new loan and refinancing process.
Refinancing may be the perfect option if you intend to live in your home for a long period of time and are looking to save money.