“Refinancing” means taking out another loan, usually one with better terms, and using it to pay off your original mortgage. I know. This sounds kind of like paying off a credit card bill with another credit card. But trust me. It’s not.
First off, refinancing is a lot less risky than using a credit card to pay off another credit card (which is known as a “balance transfer”).
Second off, as long you as you keep making your monthly payments and find a loan that better meets your financial needs, you will not be in a worse position than before (unlike a person who simply shuffles around their debt).
Refinancing goes something like this:
- Qualify for a new loan that better meets your needs
- Pay off your initial loan (using your new loan)
- Start paying off your new loan
If your current plan is not working for you, get in touch with a mortgage consultant to discuss your options.