A refinance should always give you a better overall deal than you have now.

Refinancing used to be commonplace, and it's slowly coming back around again since the economy is getting better. The thing to remember is that nothing is free and a refinance isn't a given. You need a certain amount of equity before a lender will qualify you. It varies by lender, but Bankrate says that you'll need a minimum of about 80 percent loan-to-value.

Also, remember that there are fees to consider. A refinance is a whole new mortgage, so you'll have many of the same fees, such as loan origination, as when you bought the house. But if the numbers are right, here are 4 ways that refinancing your home can give you a better deal.

#1: Get a Different Mortgage Loan Term

When you hear about the 'life of the loan,' that's how long you'll make payments to the lender before owning your house outright. Maybe your house is financed for 30 years, since that is relatively common. But a 15-year mortgage is also possible. You could own your home a lot sooner. But did you know that there's also 10, 40 and even 50-year loans? U.S. News and World Report says a 50-year mortgage isn't ideal, but it's possible for some homeowners.






Only your lender can tell you which options are open to you. But refinancing with a whole different term opens up a lot of possibilities, from making your house more affordable to letting you own it sooner than you could under your current term.


Crunch some numbers on your own before committing to a new mortgage.

#2: Secure a Fixed Interest Rate

Creative financing is a fancy way of saying that there's more than one way to get a home mortgage. For some homeowners, the early years of the mortgage are a lot different from what comes later. A refi can get you into a fixed-rate interest loan that eliminates surprises.

Balloons and the wide variety of adjustable rate mortgages (ARMs) offer low payment, good interest rates or both in the beginning, but then payments can go up. Sometimes, a lot. With balloon interest, payments are low for a very short time, says Mortgage Calculator, then the remaining balance of the mortgage is due at the end or the loan must be refinanced. ARMs give you a fixed rate at first, but it varies later. In either case, a fixed-rate loan gives stability.

#3: Gain Access to Equity Without Selling

With every payment that you make, you own a little more of your home. If you've been paying for a while, you might have quite a bit of equity. Also, if property values in your area have gone up, you might have more equity than you realize. Problem is, you'd ordinarily have to sell your house to tap into it.

A cash-out refinance lets you use the cash value that belongs to you without selling your house. There's more to it than that, of course, and cash-out refis aren't as easy to qualify for as they once were. But if you have sizable equity, you might be a candidate for a refinance that restructures your loan into a brand new one plus gives you a check for part of the equity.


The burden of a mortgage might be a lot lighter with the right refinance terms.

#4: Lower Your Total House Debt

Interest means that you'll pay a lot more for your home than the original loan balance. If you have a 30-year loan at a certain interest rate, you'll make that final payment in 30 years and will have paid a lot more than the original price tag on the house. With a lower interest rate and a shorter term, you can cut that dramatically.

Interest carries through the life of your loan. The lender lets you borrow the mortgage amount for a set term, and interest is their fee for that privilege. It's how they make their money. The longer the term and the higher the interest, the more they'll get. But if you qualify for a lower rate and a shorter term, you'll pay a lot less and own your home outright a lot sooner.

The first thing that you need to refinance your home is the right amount of equity.  That's how your loan-to-value ratio is calculated. At eppraisal, we can help you get a good idea before you start filling out paperwork. It's as easy as the click of a button, so get your free property valuation today and start learning whether a home refinance is right for you.