Always check when mortgage rates are low

Whenever rates are low, many borrowers will find that refinancing their first mortgages makes sense. When you refinance, you are getting a new first mortgage that pays off and replaces the old one. The move can lower your monthly payments and/or your overall interest bill. That's because you're replacing an older, higher-rate loan with a new, lower-rate one.

Call Mr. Mortgage, Jim Pendleton for best mortgage rates in your area:

• You have high-rate second mortgage debt. Some borrowers can refinance both first mortgages and second mortgages into new, lower-rate first mortgages. They do this by going through a cash-out refinancing, or a refinancing in which the new first mortgage is larger than the old one. Borrowers get the difference between the old loan balance and the new one at closing to spend as they see fit.
  
• You need to tap your equity for a big expense. Rather than get a separate equity loan, some borrowers choose to just refinance their first mortgages and take cash out at closing to pay for home improvement projects or other things. The move can make sense for people who need large sums of money and don't think they'll be able to pay their balances off quickly. That's because first mortgages generally have lower interest rates than second mortgage loans.
  
• You want to shorten your loan term and shave your interest costs. You may not have been able to afford the payments on a 15-year loan when rates were much higher, so you opted for a 30-year one. But now, rates have fallen enough that the payments on a 15-year loan would be manageable. By refinancing your current 30-year loan into a 15-year one, you can build equity more quickly and slash your total interest bill.