Refinancing is a good way to reduce or obtain lower interest rate. Investors need to determine why they want to refinance or is it really necessary to refinance. Identifying the main objective or purpose of refinancing makes your goal a lot easier. Some of the probable causes of refinancing is to switch to a lower interest rate, like debt consolidation, to shorten the mortgage term. Or it could also be about adjusting the mortgage rate; either they have the desire to switch from fixed to adjustable mortgage rate. Investors have their own reasons why they consider refinancing their property.

Investors often find it challenging to generate cash and reduce expenses. The process of refinancing allows the investors to save money and run from the high interest rates. They switch from high interest rate down to a much lower option. Just the idea of reducing the interest rate is enticing; however, an investor must be aware that refinancing offers TRUE benefit to avoid pitfalls. If in doubt, it is always best to seek advice from a property investment specialist.


Refinancing is designed to secure a loan with lower interest rate compared from your existing loan. Saving 1%-2% is better than nothing, work on your math, calculate and from there, you can assess how much savings you can earn from it. However, investors must be aware that transferring from your existing loan to refinancing is not free of charge and may cost you extra fees for the application, title search, etc. Through refinancing, you are decreasing your monthly mortgage payment which allows you to save cash and use it for other expenses.

Investors who intend to shorten their loan term may also consider refinancing as a solution. The existing loan transferred to another loan may not show great difference with your mortgage but the shorter term is quite noticeable. Through refinancing, a 40 year fixed rate mortgage can be shortened to 20 years with slight change in your monthly payment.

Homeowners may tap the equity of their home intended for education or to be used for home remodelling. Bottom line is, it can work or make things worse. Refinancing is considered as a smart financial move if it shortens your loan term, diminish your monthly repayment and help you establish your equity faster. Again, there are property specialists and financial advisers to guide you and help you make the right decision when it comes to your investment or refinancing issues.