Mortgage refinancing is when you break your current mortgage in order to get a new one. Now you may be wondering why anyone would do this. But the fact of the matter is that there are many good reasons why a homeowner might want to refinance their mortgage.
And here are 5 of those reasons:
1. Lower your interest rate
If interest rates on mortgages have gone down since you entered your current contract – or if you are eligible for a better interest rate because you’ve improved your credit – then refinancing can be a great way to save money on interest. Remember even a small difference can mean thousands of dollars in savings over your amortization period.
2. To finance home renovations
Are you planning a major home renovation in the coming months? Refinancing your mortgage is one way to access your home equity in order to pay for these renovations. If you need to borrow money for your home upgrades, this is a much better and lower-cost option than other forms of borrowing such as credit cards.
3. To buy an investment property
The value of homes has skyrocketed in recent years and those who have invested in real estate are doing very well. That being said, you still need to get a down payment from somewhere and refinancing your mortgage is one way you can get the money you need to invest in an income property.
4. To consolidate your debts
If you have high interest consumer debts, then consolidating those debts is one of the best strategies for lowering your interest payments and ultimately getting out of debt faster. If you have enough equity in your home, refinancing your mortgage can be an inexpensive way of consolidating your debts.
5. To change lenders
If you are unhappy with your current mortgage lender for some reason – or if you are simply now eligible for a traditional mortgage at a lower interest rate than you were before – mortgage refinancing is really the only way you can change lenders before your current mortgage term ends.
Is Mortgage Refinancing right for me?
Mortgage refinancing can be a great solution for any of the reasons listed above but because it requires breaking your current mortgage, there is a financial penalty associated with it. To determine if the cost is worth it, you should speak with your mortgage broker to run the necessary calculations.
Contact AKAL Mortgages today
To learn more about a mortgage refinancing and if it’s right for you, contact AKAL Mortgages today.
When we say YES! We stand behind our promise.