Refinancing is a valuable tool. In this blog Mortgage Broker, Charlene Ward shares 5 tips on refinancing your mortgage.
Refinancing can be considered for a number of reasons. Most often, this can be to pay existing debt. This is an ideal solution, especially for credit card consumers, for obvious reasons seeing as the interest paid on your credit card is often close to 20 percent, as opposed to your mortgage rate which usually sits under a quarter of this. The convenience of making one payment also makes this an easy yes for homeowners.
Reinvesting is another common reason homeowners turn to refinancing. Reinvesting can include a broad spectrum from borrowing money for renovations to investing in real estate or even a business, as the majority of investors will rarely use their own money. Despite the purpose of your refinance, it’s important to consider that your new mortgage product should be debated beyond just your rate.
It’s important to know the value of your home as the bank or mortgage lender will only allow you to borrow a maximum of 80% of the value of your home.
When refinancing, your mortgage payment will increase, don’t forget to budget for this.
What is your reason for refinancing? Are you refinancing to buyout a spouse due to a separation? In this case, the lender will allow you to take out more than 80% of the value of your home. It’s important to disclose everything to your mortgage broker so they can find the best solution for you.
What are your future financial goals for your family? Are you debating home renovations? Would having emergency savings available help you sleep better at night? Ask your mortgage broker if a home equity line of credit is also an option when refinancing.
Depending on which mortgage lender you refinance with, there are perks such as complimentary home warranty programs or even discounts on your mortgage penalty. Don’t forget to ask about this.
This blog post is written by Mortgage Agent, Charlene Ward. Here’s how you can reach Charlene
