3 Reasons to Refinance Your Mortgage
posted in Mortgage News
There may come a time in life when refinancing your mortgage is a viable option, and there are several reasons in which this might be the case. To find out if refinancing your mortgage is a wise decision for you, speaking to a mortgage broker or financial advisor could help you decide.
To give you a brief rundown of the 3 most popular reasons for refinancing, and see our guide below:
1. To get a lower rate
Many homeowners seek to refinance their mortgage in order to get a lower rate, but it’s important to shop around with the help of a qualified mortgage broker, to make sure that you get the very best rate available. Note that mortgage brokers often have access to deals that aren’t directly available to the public.
With the help of your mortgage broker, read through all of the fine print and ensure that it gives reasonable flexibility for the possibility of real estate or personal and circumstantial changes, that may occur in the future. Think carefully whether a variable, or a fixed rate mortgage would be best; your mortgage broker can also help you with this decision.
2. To consolidate debt
If you’re refinancing your mortgage to pay down or close your credit, it’s imperative that you carefully choose between those two options. Once the refinance is complete, if you want a credit card or credit line to remain accessible to you, you’ll need to have your mortgage broker check that this will still be possible.
You might be able to increase your mortgage payment to pay it down quicker if your total monthly payment drops, and in doing so, you’ll still save money on interest.
3. To make renovations to your home
Calculate the cost of renovating your home, and ensure that you get enough funds when refinancing to cover all of the work. Talk the entire project over in detail with your general contractor and/or project manager to get a full and detailed understanding of exactly how much money the renovations are likely to cost, taking into account unexpected extras, too.
Unfinished projects due to a shortage of money can lead to a frustratingly unlivable home, and perhaps more importantly, further debt. Even if you take out more money than you need, you can put the money back against your mortgage, in the form of a mortgage prepayment.
Never be afraid to seek professional help when it comes to making any mortgage related decisions, as sometimes, a little investment in the right advice, can save you hundreds, if not thousands of dollars further down the line.