How Does Home Refinancing Work?

Video Transcript

"You own your home and you want to look at refinancing, you want to consolidate some existing debt or get a lower interest rate. Hi I'm Carrie Kukuda the Someday Coach. I'm here to tell you a little bit about refinancing and some things to think about before doing so. If you already have a loan presently, and you are considering consolidating some existing debt, and rolling it into your loan, you want to make sure that the loan to value on your home is there enough to cover those debts to bring it into the loan. So I would suggest to look into how much the value of house is currently and how much room you have to put that information, or put that debt, existing debt into the loan. As well to lower interest rates, maybe you are at a higher interest rate at this time, maybe you've improved your credit or maybe the rates are dropped. Typically it's like a one percent rule on the homes it might be a little bit higher, but if you can save a little bit more then a one percent typically, definitely two that's something to consider on whether to refinance or not. But one big important thing that you need to remember is if you are planning on being in your home for a while, because the refinancing does have fees, and you will have to pay closing cost on that mortgage so you want to be in the home long enough to repay and start saving the money. So typically that is usually three to five years but I would consult with your mortgage consultant or loan officer and have those, have them run the numbers for you so that you can make an educated and smart choice, Carrie Kukuda thank you."