Reasons to Refinance your Mortgage

If you have never refinanced your mortgage, you may not really understand the point of it or how it can benefit you. That’s ok though – many people have never had the need to refinance so they don’t really know why they may want to consider this option. Here are a few reasons why you may want to look into refinancing your mortgage soon.

Pay off your consumer debts

If you have a lot of credit card debt, you can use a refinance on your mortgage to help you pay it off. Oftentimes, the interest rate on your mortgage is going to be lower than what you would be paying on your credit cards or lines of credit.

With refinancing, your mortgage company will extend the money to pay off your credit cards and then add it to the balance of your mortgage. This may also allow you to free up a lot of cash flow with your income and provide you with the convenience of only having to make one monthly payment.

Secure a better rate

Many people will lock into their mortgage term for 3, 5 or even 7 years. In that time, interest rates can change. If they change in your favour, you may want to take advantage of that and lock in at a much lower interest rate. If you do this, and keep your mortgage payment the same, you may be able to pay off your mortgage much faster than anticipated.

Access the equity in your home

Do you want to do a major renovation to your home but don’t have the cash to pay for it? You may be able to use the equity in your home to finance the renovation, so you don’t have to put it on credit cards or lines of credit.

Work with a better lender

If you don’t really like the terms of your current mortgage or you feel as though another lender can offer you something better than you have right now, it may be the right time to look at refinancing.

This can also work if you previously didn’t work with a mortgage broker, and you want to start working with one to see what your options are.

Not if you’re moving soon

If you plan to move within the next 5 years, you may not want to refinance your mortgage if you can avoid it. Oftentimes you won’t receive the benefits of refinancing within a year or two of doing it. So if you are thinking about selling anytime soon, it may end up costing you more to do it than it’s worth. This is because there are often fees involved for refinancing and even penalties for breaking the mortgage early.

Contact Akal Mortgages today

If you have questions about your mortgage, contact Akal Mortgages to speak to a broker, and see what you can do right now. We can help you decide if a mortgage refinance is the right choice for you and if so, help you to find the most favorable interest rates and terms. Call us today to get started.