If you already have a house mortgage, one thing you can do to help lower your interest rate or your monthly payment is refinance your loan. There are many reasons and ways to get a house mortgage refinance done, so the possibilities for you are endless.
Why Should I Refinance?
There are a number of reasons to get your mortgage refinanced. Some people do it to lower rates, other people to do it in order to tap into some of their home equity. It all depends on what you need out of your loan.
- Get Cash Out – The biggest reason people refinance their mortgage is to take out some of the equity they’ve put into it. This will essentially start your mortgage over again, meaning you are back at 25 to 30 years to pay off your loan; however, it will usually allow you to walk away with a sizable chunk of money. You can use this money for home improvements, tuition, or to pay down other debts.
- Lower Your Interest Rate – The mortgage market is constantly changing and interest rates tend to jump up and down. By refinancing, you can take the opportunity to get a much lower interest rate on your loan, usually resulting in a lower monthly payment. Just be sure to look at the fine print, however, because some lenders won’t let you refinance for a lower rate until you are already several years into your mortgage.
How Do I Refinance?
You have options when it comes to how to refinance your home. Below are some of the more popular ones, but be sure to talk to a lender or a broker and decide which method is right for you.
- Get a New Mortgage – The most straightforward way to refinance your home is to simply take out a new mortgage on it. You need to break your contract with the current lender in order to get a new one, but many of the loan documents have clauses which allow you to do just that. Some lenders require a waiting period, so just make sure you read your loan documents very carefully.
- Add a Home Equity Loan – Another option is to add on an additional loan to the house. Sometimes it can be the equity you’ve already put in, or it can be for the untapped equity of the loan. Once you take this out, you are responsible for interest-only payments for the balance.
- Government Programs – If you are upside-down on your home and want to refinance to get a better rate, look into some of the government programs. Canada wants to keep people in their homes if there’s any way possible, so they will work with you to help keep your monthly payments at a reasonable level.
If you are ready to refinance your house mortgage or if you have any additional questions or concerns, head over to www.mymortgagebroker.com. Steven Crews and his helpful staff will assist you and give you all of the answers you need.