Question: When is the best time to refinance?

Answer: Many people flock to refinance while mortgage interest rates are low, particularly when rates are two percentage points below their existing home loans.

Other factors, like when to finance, will depend on how long you plan to hold on to your home and whether you have to pay considerable fees to refinance. It also will depend on how far along you are in paying off your current mortgage.
If you expect to sell your home shortly, you are not likely to recoup the costs you incurred to refinance. And if you are more than halfway through paying your current mortgage, you probably will gain little by refinancing. However, if you are going to own your home for at least another five years, that is probably long enough to recoup any refinancing costs and realize real savings as a result of lowering your monthly payment.

In fact, if it costs you nothing to refinance, you can gain even more. Many lenders will let you roll the costs of the refinancing into the new note and still reduce the amount of the monthly payment. Plus, there are no-cost refinancing deals available. Contact your lender, and its competitors, before you refinance.

Question: Can I refinance a home loan more than once?

Answer: You most certainly can. During the most recent refinancing boom, for example, many homeowners refinanced their home loans two or three times within relatively short periods of time because interest rates kept treading downward, making it extremely attractive to trade in one loan for another. Just remember that refinancing is basically like applying for a mortgage all over again. Each time you refinance, you will still have to go through the application process, get a home appraisal, and likely incur closing costs. Also, if you have a pre-payment penalty clause in your present mortgage, you will have to pay that penalty if you refinance. So be certain that it is actually worth it for you to refinance.

Question: Can an older homeowner who is cash poor but house rich use their home to tap into the equity?

Answer: Yes, but not so much by refinancing. A reverse mortgage is a better, and increasingly popular, option for older Americans to convert home equity into cash. Money can then be used to cover home repairs, everyday living expenses, and medical bills.
Instead of making monthly payments to a lender, the lender makes payments to the homeowner, who continues to own the home and hold title to it.

According to the National Reverse Mortgage Lenders Association, the money given by the lender is tax-free and does not affect Social Security or Medicare benefits, although it may affect the homeowners' eligibility for certain kinds of government assistance, including Medicaid. Homeowners must be at least 62 and own their own homes to get a reverse mortgage. No income or medical requirements are necessary to qualify, and they may be eligible even if they still owe money on a first or second mortgage. In fact, many seniors get reverse mortgages to pay off the original loan.
Repaying a reverse mortgage is not necessary until the property is sold or the owner moves. Should the owner die before the property is sold, the estate repays the loan, plus any interest that has accrued.