When refinancing your home there are many advantages and disadvantages. One advantage of refinancing is you can use the money you get when you refinance to pay off some bills. By paying off some bills up front it can save you money in the long run. Another advantage of refinancing is you can invest the money you pull out of the house. One thing you can do with the money you pull out of the home is use it as a down payment in acquiring a second property.
One last advantage of refinancing is you can get better terms on your mortgage. If you have an
adjustable rate mortgage and the adjustment period is coming up, by refinancing to a fix rate mortgage you can save yourself from paying a higher rate in interest. One disadvantage of refinancing is you can end up paying a lot in closing cost. It is recommended that you ask the company or bank you're going to refinance with to give you an estimate on the closing cost.
Another disadvantage of refinancing is your monthly payments can go up. It is important if you're going to refinance that you know what the new payment and terms will be. It is recommended that if you refinance and you're planning to have the property for a long time that you get a fix rate mortgage. One last disadvantage of refinancing is it will take longer to payoff your house. The longer you take to payoff your house the more you will pay in interest. Refinancing does have its advantages and disadvantages. It is up to you as a homeowner to decide if refinancing is to your advantage or not.