What Are The Benefits of REFINANCING?
June 12, 2020 | Posted by: Keith Leighton
What Are The Benefits of REFINANCING?
CONSOLIDATE YOUR DEBT
There are many different types of debt - from credit cards to lines of credit to school loans to mortgages. However, many types of consumer debt have much higher interest rates than those you would pay on a mortgage. Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple. Keep in mind, you need at least 20 percent equity in your home to qualify.
GET A LOWER INTEREST RATE
Depending on where you are in your mortgage term, you could refinance to get a better rate - especially when done through a mortgage broker. An average mortgage broker has access to 90 lenders and can find you the best rate vs traditional banks which only have access to their own rate.
MODIFY YOUR MORTGAGE
The beauty of life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. It is always best to do this when your mortgage term is up, but talk to a mortgage specialist about potential penalties if waiting is not possible.
UTILIZE YOUR HOME EQUITY
One of the biggest reasons to buy in the first place is to build up equity. Your home equity is the difference between your property's market value and your mortgages remaining balance. If you need funds, you can refinance your mortgage to access up to 80% of your home's appraised value in cash!
