fallen, says Morgan. You may not even qualify for the best rates, he adds. Refinancing in this case could actually boost your payments and interest bill rather than lower them.
On the other hand, Giles says there are those who want to refinance and take cash out at the closing to pay off higher interest rate credit cards or other debts (at 6% vs. 17%), or those who wish to convert their mortgages from 30-year fixed terms to 15-year terms in order to build equity more quickly and slash their total interest bill. Also, homeowners who pay for private mortgage insurance (PMI) because they made a down payment of less than 20% could refinance to get rid of mortgage insurance if they have built up equity in their homes. In all those instances, refinancing makes perfect sense, says Giles.