You might be considering a way to free up more cash or take advantage of lower interest rates. Maybe you’re asking yourself, “Should I Refinance My Mortgage?” The short answer is…it depends.
Deciding whether or not to refinance your mortgage can be overwhelming. When you begin considering the option, you should really try to understand why you’re looking to refinance, and then begin to weigh the pros and cons of your current loan, against the possibility of jumping into a new deal.
When you’re looking to refinance your mortgage, the biggest pothole you’ll come across involves hidden terms and conditions and most importantly, fees. What really makes a refinance worthwhile is when you weigh any additional fees and penalties that will come into play, against the long-term financial benefits of remortgaging your home and still come out ahead. If you are looking online, you’re also going to want to make sure that you understand thoroughly, not only the fees involved, but the terms that the lender is imposing on the deal.
It all sounds like a lot, but with a little advice, it’s simple enough to decide if it’s time to consider remortgaging your home. To help you along, we’re going to look at some of the reasons you would want to consider remortgaging, as well as some of the fees and issues that you might face during the process. If you’d rather talk through your situation 1-on-1, don’t hesitate to contact Peter to discuss your mortgage options.
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Good Reasons to Refinance Your Mortgage
Some of the pros to refinancing your mortgage, center around accessing additional funds for things like paying off debt, investing in another property or simply taking advantage of lower interest rates to help you have more money monthly, or pay off your mortgage faster.
Debt Consolidation
If you have some high-interest debts that are weighing you down, refinancing can help you to not only consolidate those debts into your mortgage payment, but can often times save you hundreds, if not thousands, in interest payments alone.
Lowered Mortgage Payments
Refinancing your mortgage can help you to lower your monthly mortgage payments and free up some of your cash to use somewhere else. This is especially helpful if you find your monthly payment is a little more than you can comfortably handle, or if you find yourself with added, unexpected monthly expenditures. In these cases, refinancing your mortgage can give you a little extra room to breathe each month.
Save Money & Pay Off Your Mortgage Faster
If interest rates have taken a dip since you last financed your home, refinancing can be a great way to take advantage of those lower rates, letting you lock them in for a longer period of time and either lower your payments, or help you to pay off your mortgage faster.
Access Extra Funds
Access additional cash flow without default insurance. Renegotiating your mortgage to free up extra funds is a great way to help you invest in an additional property, redistribute your money into another investment, or pay to help you renovate your home.
So, When Shouldn’t I Refinance My Mortgage?
All in all, there are a variety of great reasons to refinance your mortgage, but as we mentioned before – it’s also important to remember that refinancing can be a costly undertaking in certain circumstances.
If the expenses of the refinance outweigh the benefits, it might be worth reconsidering your options. Expenses can include things like:
- Mortgage Registration Fees
- Lawyer Fees to Oversee Your New Mortgage
- Appraisal Fees to Determine the Current Value of Your Home
- Fees When Changing Lenders
- Mortgage Prepayment Charges
Depending on the number of fees that apply to your circumstances and the amounts of each of those penalties and charges, it is possible that refinancing your home could be more expensive than you initially considered.
So, if you’re asking yoursef, “Should I Refinance My Mortgage?”, you might prefer to chat about your specific circumstances by reaching out to Peter to discuss your mortgage options in Oakville, Burlington & Halton Hills!
Are you curious how much mortgage you can qualify for? Check out these mortgage calculators.
