When to refinance your mortgage
There are two good times when you can refinance your mortgage. If you have an adjustable rate mortgage, it is good to refinance during the periods of rising interest rates. If you refinance to a fixed rate mortgage, you can avoid the higher costs when the adjustable rates are going up.
Another good time is when you get a lower interest rate. In such a case, you have to make calculations and see if your monthly savings will pay back your refinancing costs.
If you have cash flow difficulties, you may want to lower your mortgage payments by extending the term of the loan. This might not be a good reason to refinance, unless you get a lower interest rate on the new loan as part of the bargain. If you extend the term of your mortgage without changing anything else, you might resolve your cash flow situation in the short run. In fact, your total interest paid on the mortgage will be higher.