Refinancing Or Mortgage Switching?
A mortgage refinancing is when you pay off your current mortgage and start a new one with the same or a different lender. You may refinance your mortgage to obtain a cheaper interest rate, gain access to equity in your property, or consolidate your obligations. However, breaking your mortgage early may result in a substantial pre-payment penalty, thus mortgage refinancing is also rather pricey. Make sure you do your homework and consult with us before making a choice.
Reasons To Refinance Your Mortgage
Obtaining a Cheaper Interest Rate
Depending on the pre-payment penalty and the size of your existing mortgage, refinancing to achieve a lower interest rate can save you a lot of money over time.
Accessing The Equity in Your Property
You might be able to access the equity in your house by refinancing your mortgage. You could be able to have access to up to 80% of the value of your house, minus any existing debt. That extra cash might be used for financial investments, house improvements, or the education of your kids.
Refinancing for Debt Consolidation
A mortgage refinancing might be an option for people who have amassed enough home equity to utilize the funds to settle other, higher-interest debt. Mortgage refinancing, for instance, can be used to consolidate debt in the event that you have many loans, credit lines, or credit card payments to pay off at once.
You should ask yourself the following questions before refinancing:
- How does your current mortgage interest rate compare to what’s currently on the market?
- What fees are involved in refinancing your mortgage, including closing costs?
- Are you consolidating high-interest debt?
- How much will it cost you to break your existing mortgage? (prepayment penalty)
- Would refinancing really benefit your daily life and financial goals? For simplicity, rank the level of comfort you would have from one to 5 by refinancing.
Frequently asked questions
What is a mortgage refinance?
Refinancing your mortgage means the loan that is now secured by your house is replaced with a new loan.
What are the benefits of refinancing?
If you're interested in paying off debt with a high interest rate, reducing your monthly mortgage payment, or decreasing the time of your mortgage repayment, you might want to think about refinancing.
Can I Refinance With My Current Bank or lender?
Yes, in a nutshell, however it might not be the greatest choice. Your existing mortgage provider is a good option if you want to refinance because: They already have a record of your information, and they could make you a fair bargain to stay with them. However, it's worthwhile to search around if you're seeking for the greatest available offer.
How Much Equity Do I Need to Refinance?
In most circumstances, you may refinance up to 80% of your home's worth. For instance, if your home's value is $1,000,000, the maximum amount you may refinance to is $800,000.
How Soon Can I Refinance My Mortgage Following the Purchase of a Home?
In theory, there is no minimum waiting period required before refinancing a regular mortgage. In principle, you must wait until you have accumulated sufficient equity in your property before you may access any cash.
Do I need to obtain an appraisal of my home to refinance?
In most circumstances, a home appraisal is required in order to refinance. Depending on the circumstances an appraisal may not be necessary. Consult with me before beginning the refinancing process to see whether an appraisal is required or not.
Is it possible to use a refinancing to get some cash out of my home equity?
Yes. We have banking and lending partners who provide a number of ways to borrow against the value of your house. Discuss your cash-out refinancing options with me so I can help you choose the best one.
