Whenever rates are
low, many borrowers will find that a mortgage rate refi of their
first mortgage makes sense. When you refi, you are getting
a new first mortgage that replaces the old one. A mortgage
rate refi can lower your monthly payments and/or your interest
Why? Because you're replacing an older, higher-rate
mortgage loan with a new, lower-rate loan. For example, a
30-year fixed rate mortgage for $150,000 at 8.5 percent can
refinance into a new 30-year loan at 7 percent.. Doing so cuts
the monthly payments and/or your overall interest bill.
Additionally, rather than get a separate equity loan, some
borrowers choose to just refinance their first mortgage in order
to take cash out at closing to pay for home improvement
projects, business expenses, education or even travel.