Even though most mortgage loans are originated for a term of 25 to 30 years, few borrowers keep the loan for more than 5 to 10 years. In many cases, mortgages are paid off when the home is sold. However, many home owners refinance their loans, and for many reasons. A key advantage of being a mortgage borrower is the ability to change financing as conditions change.

Refinance when you need to raise money for some purpose. Over time, you accumulate equity in your home. Equity is the difference between the value of the home and how much you owe on the mortgage. Essentially, your home equity is a form of personal wealth, just like stocks and bonds. Equity increases as the value of your home rises. It also increases as you gradually pay off the principal of the mortgage loan. More->