Refinancing in Real Estate


In part, because of the pandemic, home loan interest rates in North Carolina are incredibly low. Many homeowners are using this time to purchase the home they always wanted, or they are looking into the different refinancing options for their current home mortgage.

Why should you consider refinancing? If you are interested in consolidating debt, getting a lower interest rate, or shortening the term of your loan, refinancing might be a good option for you. Here is everything you need to know about refinancing your home loan in North Carolina.

What is Refinancing?

Refinancing is the act of replacing your current loan with a new loan. What is the purpose of this? Many individuals choose to refinance their home in the hopes of getting a lower interest rate or shortening the loan term. Both of these changes to your current home loan can save you money over the course of the loan. Refinancing is generally handled by a mortgage broker, and in NC, an attorney handles the legal aspects of the refinancing process.

The Benefits of Refinancing Your Home Loan 

There are numerous reasons why homeowners choose to refinance their home. Most often, people choose to refinance their mortgage in the hopes of getting a lower interest rate or shorten the length of their loan term. Some homeowners might choose to refinance in order to cash-out equity in their home to help fund life events or unexpected financial burdens. Here are some of the different benefits you can gain by refinancing your home:

  • Refinancing Can Help You Lower Your Monthly Mortgage Payment 

Refinancing your home can save you a significant amount of money over the life of the loan. When the economy shifts, sometimes home loan interest rates will drop. This can be a good time to think about refinancing your home. You can lower your monthly mortgage payment by taking advantage of low interest rates. If you explore the different refinancing options available, you may be pleasantly surprised by the amount of money you can save every month. Even more exciting is how much you can save over the life of your loan by reducing the interest rate on your balance. 

  • Refinancing Can Reduce the Length of Your Home Loan

Just like student loans, or credit card balances, a home loan is another type of debt. Many people do not like having such a high debt hanging over their head. If this is something that you worry about, you may want to pay off your mortgage sooner rather than later. By refinancing, you can shorten the term of your loan, so you don’t have to worry about it for more years than necessary. 

Why You Should Reduce the Length of Your Mortgage: 

    • Reducing the length of your mortgage can give you peace of mind.
    • While you may pay a higher monthly bill every month in the short-term, over the long-term the lifetime cost of your loan will be less. This can potentially save you thousands of dollars in interest over the life of your loan.
    • Shortening the length of your loan from 30 years to 15 years will help you gain equity in your home faster.
  • Refinancing Allows You to Cash-Out Your Equity

Cash-out refinancing allows you to replace your existing loan with a new loan that has a higher balance. Whether it’s from an increase in your home value or because you have a lot of equity in your home, you may be eligible for cash-out refinancing. The difference between the two loans will be given to the homeowner in the form of cash.

Many homeowners utilize the cash-out refinancing option to help them finance emergencies or other large bills given using the equity in your home to fund medical expenses, car down payments, or other “big ticket” items. Others use these options to consolidate debt or to pay for home renovations. Typically, your lender will allow you to use the cash out option for whatever purpose you choose.

Should You Refinance Your Home?

Whether you are trying to take advantage of lower interest rates or you are trying to consolidate all your payments into one simple payment, refinancing is an option that you should consider. After you get in contact with your mortgage broker, your next step would be to get in touch with a local real estate attorney. 

At Shepard Law, we walk with you and your chosen lender through the refinancing process step-by-step (and we will even treat you like family!) We make sure to explain everything to you clearly, so there won’t be any unpleasant surprises down the road. If you are thinking about refinancing your home, connect with us to see how you can get the legal assistance you need from a law firm you trust.