Most people do not wish to refinance because they do not want the clock on their mortgages to be reset. If you are already several years into your loan, you might feel the same way too. You may think that after having paid 10 years of loan with 20 years left, you will be left to start from scratch all over again. This is not necessarily the case. Some lenders are able to grant you a much shorter mortgage depending on the timeframe that you are comfortable with. In addition, you may even be able to refinance to a loan with a shorter term but still remain affordable.
Some people have the perception that they may lose out on their home equity that has been built over time if they refinance. However, that is only possible if you perform a cash-out refinance which involves borrowing more than the balance of your current mortgage. If you just focus on refinancing your balance without adding to it, your home equity will not be affected.
If you have just refinanced recently, you might be assuming that it is still too soon and you need to wait out until about a year before you will be able to refinance again. However, this is not the case as the minimum period you need to wait after refinancing is just for six months. Having mentioned that, you have to take note that each time you refinance, you will be hit with closing costs. Hence, refinancing too frequently is also not really advisable. However, if you really need to refinance because of improved credit score or wanting to secure better rates, then by all means, you should do it.
The downside of refinancing is having to pay closing costs before you can get that new loan. However, do not assume that those closing costs cannot be reduced. There may be certain costs which you cannot negotiate such as government-set recording fees, but application and loan origination fees can still be negotiated with the lenders.
If you are still contemplating whether you should refinance, always obtain as much information as possible to support your decision-making process. Sometimes, it is best to wait it out but on certain occasions, refinancing may offer greater gains for your situation. Depending on your individual needs, taking action today may prove to be highly beneficial. At other times, you need to take things slow.