Refinancing your home today may very well put much needed cash back in your pocket. Mortgage rates are nearing an all-time low as a result of the economic recession and an increasing number of people are beginning to see the advantage to refinancing.

If you’re among those weighing the pros and cons of doing a refinance this year, consider the following advantages. You may enjoy any of these perks if you move forward and refinance today:

1. You can significantly lower your mortgage payments. Refinancing may allow you to lower your mortgage interest rate, in turn lowering your total monthly payments and freeing up that cash for other purposes. If current mortgage rates are at least one point below your existing mortgage rate, refinancing your mortgage is a wise move.
2. You can begin building equity in your home if you’re not already. This is possible if you have an adjustable rate mortgage or if you have negative amortization. Because current mortgage rates are extremely low, refinancing over to a new interest rate may help you begin putting equity back in your home.
3. You may be able to lower your debt to income ratio. Refinancing your home today could help a great deal when it comes to lowering your debt load. By freeing money up from your mortgage payments, you’ll be better able to increase the payments you make on your debt load. In turn, this will improve your credit score which will eventually help you qualify for lower interest rates on any type of credit you pursue in the future.
4. You can eliminate the cost of private mortgage insurance (PMI). If you were not able to put 20% down on the cost of your home when you first purchased it, you’re likely paying a fee in a type of monthly mortgage insurance called PMI, or private mortgage insurance. PMI is added as a safeguard to the mortgages of homeowners who do not carry 20% equity in their homes in case they ever default on their loans. If you refinance, you may find that you’re able to either reduce or completely eliminate your PMI payment. This could save you as much as $150 per month, plus the additional savings you’ll get by having a lower interest rate on your overall mortgage.
5. You can get a cash infusion for a large, one-time expense. It’s better to borrow money on your home in the form of a home equity loan than it is to take out other types of loans. This is because any interest you pay on a home equity loan is tax-deductible which provides you with extra savings. In addition, home equity loan rates are usually lower than the rates for other loans such as auto loans, student loans, or personal loans. If you have a large expense approaching, such as a college tuition bill or a big medical expense, it may serve you well to take out a home equity loan.

If you think you may benefit from any of the scenarios mentioned above, you should look into refinancing your home today. Start by talking to your lender or mortgage broker to see where you stand and to find out what kind of interest rates you can land. Keep in mind that refinancing comes with a few extra costs, including refinance fees and refinance closing costs. Be sure to weigh your options and consider shopping around at various lenders. Get at least three quotes on a refinance before moving forward with a lender. Doing so will not only help you make certain you’re getting the best possible rate for your refinance, it’ll also help you gain the insight of different professionals in the industry to make sure this is the best move for you.