If you were to rank the top reasons to refinance, lowering your rate, or taking money out of your home to remodel would easily top the list.  With today’s historically low interest rates, millions of homeowners have taken advantage of these unbelievable rates, which has made refinance volumes spike considerably over the past three years.  So the big question is – when does it make sense to refinance to a lower rate?  The rule-of-thumb states that saving ½% in your rate usually warrants a refinance IF you are paying closing costs.

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Let’s face it, unexpected things happen in life that end up costing more money than is coming in.  As a result, it’s easy to accumulate credit card debt, student loan debt, etc.  The good news is that if you’ve owned your home for at least the past three years, then you probably have the equity you need to cash out enough money to pay off all or most of your debt.  The main benefit of consolidating debt with a larger mortgage is a significant increase in cash flow.  Most of our clients end up saving $500 to over $1,000 in monthly expenses, which can have a huge impact on your ability to live better.  Also, consolidating a mortgage to pay off debt typically has significant tax advantages, so talk to your CPA and find out.