Compare market interest rates to see what result a refinance would have on your bottom line Most people refinance their homes in order to get a lower monthly interest rate. This leads to less total interest paid over the life of the loan, which means more cash in your pocket. Perhaps when you bought your house the market rate was 7%. Now market rates are 5.5%. Most financial advisors say in order for a refinance to be financially viable, market rates must have fallen 1% or more, since there are fees associated with a refinance (attorney fees, origination fees, etc.). If you paid $300,000 for your house, the monthly payment would be $1,995.91 over 30 years and you would pay $418,526.69 over the life of the loan in interest. If you refinance at 5.5%, your monthly payment would lower to $1,703.37 and you would only pay $313,212.12 in interest for a savings of $105,314.57, assuming the new loan is also for 30 years. If you refinance many years into your loan, you may not want to do another 30-year loan; you should choose a 15-year loan (or less).

I recommend:  Use Excel or an online mortgage calculator to see what your monthly payment would be using a variety of interest rate scenarios.

Cash out home equity when getting a Georgia mortgage refinance loan Although not the smartest financial idea, families that need fast liquid money can choose to cash out some of their home equity when completing a refinance. If you bought your house for $200,000 and it is now worth $225,000, when you refinance, the lender may let you borrow the full $225,000 and pocket $25,000 cash for immediate use.

I recommend:  Read this excellent article from BankRate called “When is cash-out refinancing a good option?” Visit LendingTree to get Georgia refi rates and loan offers from multiple companies.

Remove PMI from your monthly mortgage payment Lenders assess PMI on loans that have less than a 20% down payment. This protects the lender in the event of your default. Lenders assume once you have more than 20% of your own money invested in a house that you are less likely to run out of the loan due to the amount of personal money you have sunk into the home. Some mortgage contracts automatically remove PMI once the owner's equity reaches 20%; other contracts require a refinance and appraisal to take off PMI. Depending on your creditworthiness, PMI may cost tens or hundreds of dollars a month. Its removal represents substantial savings to your bottom line.

I recommend:  This article discusses various situations in which PMI may or may not be removed from your loan. Consult an appraisal service to find out if you may be a candidate for PMI removal.