With rates expected to rise throughout 2022, it may not be the best time to refinance if you’re looking to lower your current rate. However, there are other financial reasons to refinance including:
Getting rid of mortgage insurance because your home’s value has increased. You may be able to reduce the cost of private mortgage insurance (PMI) on a conventional loan if you don’t have the 20% equity required to avoid it.
Lowering your monthly payment by replacing a 15-year mortgage with a longer-term, 30-year fixed-rate loan.
Paying your loan off faster by refinancing a 30-year term to a 10-, 15- or 20-year term.
Paying off an adjustable-rate mortgage (ARM) before the ARM rate and payment adjusts higher than current 30-year rates.
Tapping your home equity to make home improvements, consolidate debt or buy a vacation home.
Replacing a government-backed loan with a conventional loan, to get rid of lifetime FHA mortgage insurance required on loans backed by the Federal Housing Administration (FHA).