While these arguments may be true, increasing the number of years that you owe on your mortgage is rarely a smart financial decision, nor is spending a dollar on interest to get a 30-cent tax deduction.
Many homeowners refinance to consolidate their debt.
Today, many lenders say 1% savings is enough of an incentive to refinance.
Reducing your interest rate not only helps you save money, it also increases the rate at which you build equity in your home, and it can decrease the size of your monthly payment.
One of the best reasons to refinance is to lower the interest rate on your existing loan.
Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%.
Homeowners often access the equity in their homes to cover major expenses, such as the costs of home remodeling or a child's college education.It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money and eliminate that mortgage payment.Taking cash out of your equity when you refinance doesn't help you achieve any of those goals.If interest rates are falling, these homeowners can reduce their loan's interest rate and monthly payment, but they won't have to worry about interest rates rising in the future.While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt.