Home Mortgage Refinance
Should I refinance my home mortgage?
Getting a mortgage on your home is often a long-term consideration. However, a home mortgage should never be a “forever” deal. You must always have options available to you – and most often, you do! And strategically considering all of your home refinance alternatives might even end up saving you a lot of money in the long run.
From debt consolidation, to leveraging lower interest rates, to tapping into equity that you’ve already created in your home – there may be any number of great reasons why refinance mortgage makes sense. And you owe it to yourself evaluate all of the practical options that may be available to you.
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If you are wondering whether you should refinance at all; and if so, when should you refinance?; then rest assured: You are not alone in this predicament! Many homeowners find themselves in a situation where finances are tight, and they need some practical mortgage financing options to think about.
Let’s help you understand the power that refinancing wields.
The Cost Might Be Worth It!
Most homeowners worry about the costs for a refinancing deal – as they should be, because those costs can sometimes be significant! But they often don’t consider the benefits that those costs can unlock for them. Consider this:
Refinancing your mortgage can actually reduce the interest that you pay, over the life of your mortgage!
That’s because of how your monthly payments are calculated, with a significant amount of those monthly payments being applied to the interest component of your loan. So, if you can lower your interest rate by a minimum of 1 percentage point (i.e. at least 1%) from your current rate, then don’t think twice – because the answer to your question “Should I refinance my mortgage” is an unequivocal YES!
Sure, there may be an upfront cost associated with the refinancing. And sure, in the short run, those costs might look astronomical to you. But remember, mortgages and refinance loans are for the long-term. And a 1% decrease in interest rates, for the refinanced loan, will more than offset those costs in the long run when considering it over the life of your plan.
When’s The Right Time?
When it comes to refinancing, another important factor to consider is: When to refinance?
When thinking of a mortgage, timing it correctly could mean the difference between getting a good deal and a bad one! Often, these decisions (about refinancing or taking on a new mortgage) may be happening when you already have an existing mortgage on hand – which you are trying to wrestle with. Bad timing could mean you are saddled with two sets of mortgages simultaneously; and that’s a situation you don’t want to be in for too long!
If you are planning to buy a home while also selling your existing one, then you need to time the sale so that it closes first, before you buy your next property. Otherwise you may end up in a situation where you are forced to pay mortgage instalments on two properties instead of one!
Risk Management Is Important
Personal finances, whether it relates to negotiating a new mortgage, discussing home loan refinance options, or buying or selling a home – is all about managing the risks associated with the options you choose. You need skills to adapt the choices available to maximize the benefits to your particular financial situation, and then navigate the processes, timing and the outcomes of each choice.
Our highly trained and experienced team at Mortago are always available to help you select the mortgage refinance options that are right for you; and then to work with you in navigating through the process so you accomplish the positive outcomes you seek.