There are many reasons why you might want to refinance your current mortgage. Consider the following benefits to see whether it makes sense for you to refinance:

Lower your payments.

You may be able to lower your payments by replacing your existing mortgage with a new loan at a lower rate of interest.

Unlock the equity in your property.

Many properties have appreciated over the last several years. You may want to use the equity you've earned in your property to "cash out" money for other purposes such as credit card debt, student loans or car loans. Generally, interest rates are higher on loans secured by something other than real estate. In addition, interest paid on debt secured by your primary residence is tax-deductible. The combination of these two factors can help you significantly lower your payments on non-real estate-related debt. A new loan against your home can allow you to pay off your existing mortgage and take out additional money to pay off other debts.

Use the equity in your property to buy another.

The “cash out” you receive from a refinanced mortgage on your primary residence may be used as a down payment toward a vacation home or investment property. The interest rate you pay on a loan secured by your primary residence will be lower than the rate offered on a loan secured by a vacation or investment property. For this reason, it often makes sense to use the equity in your home to help with the purchase of another property, rather than taking out a larger loan against the new property.

Switch from an adjustable-rate mortgage to a fixed rate mortgage.

If the interest rate on your loan is currently adjustable, or will be soon, it may make sense to refinance in order to fix the rate of interest you'll have for the remaining term of your mortgage. Borrowers who plan to remain in their property for some time, or who plan to rent the property in the future, may want to lock in their interest rate to be certain of their future monthly payments.