Refinancing a mortgage is when you get a new loan to replace your current home loan. Depending on the type of loan you get, refinancing could help lower your interest rate or monthly payment or shorten your repayment terms to pay off your loan sooner.
When current mortgage and refinance rates are lower than what you are paying on your existing mortgage, you might want to jump on refinancing your home as soon as possible. But refinancing a mortgage can ding credit and might require some additional costs upfront. Here’s what refinancing means for your credit report and score.
How Refinancing Your Mortgage Impacts Your Credit
Any time you complete a credit application, your credit score will take a temporary hit. The dip comes from the hard credit inquiry, length of credit history and the new debt amount.
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