Reasons to Refinance in California

Allison Beatty
LoanBiz Columnist


Home prices have soared in California in recent years, making California residents prime candidates for mortgage refinancing. If you're looking to consolidate higher interest loans or combine two mortgages into one, then refinancing can be a good option. Here are some top reasons to refinance your California mortgage.

Refinance for Debt Consolidation

Many California home owners refinance to consolidate debt. This can be a solid financial move if you are struggling to pay off high interest credit card debt or other loans. To find out if refinancing will put you ahead, look at your overall mortgage loan commitments and consider:

• The cost to refinance
• The interest rate you'll receive
• Your current debt load and interest rate(s)

Refinance to Tap into Home Equity

With skyrocketing home prices in California, many people are sitting on a nice financial nest egg. If you're planning a kitchen remodeling or other major expense, why not refinance to access those funds? The advantages are:

• You typically can access 80 percent or more of your equity
• Refinancing is relatively quick and often requires little paperwork
• The mortgage finance charges may be tax deductible

Refinance for Rate or Payment Change

Many California home owners refinance their mortgages to reduce their monthly payment and/or lower their interest rate. Others refinance to switch from an adjustable rate to a fixed rate mortgage. When shopping for mortgage rates, remember to check:

• The lender's fee schedule
• Any points or rate buy-down options
• The pros and cons of fixed versus adjustable rate mortgages

The surge in California home prices has prompted many people to refinance to tap into their growing equity. Before taking this step, understand your refinancing goals. You'll then be more prepared to talk with California mortgage lenders and examine all the options.

Source
bizjournals.com

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.