Refinancing your existing mortgage can make sense for a lot of reasons. Let’s look at some of the most beneficial scenarios, for example.
Your old fixed mortgage rate is too high:
The fixed rate mortgage that you obtained years ago may be locked in at higher rates than the current rates available on the market. Refinancing the remaining portion of your mortgage at lower fixed rates can be a very cost effective way to reduce your overall interest burden. Most lenders will allow you to “blend and extend” which means they will blend the penalty for breaking the term (usually an Interest Rate Differential) with the rate for the new extended term. The idea is to get a lower rate and protect against rate increases in the future.
Debt Consolidation is another popular reason to refinance your mortgage. Have you ever considered how high the average credit card rate is? You could be carrying debt at an interest rate of 19% or 20%, and worst of all, you could be carrying it for years. Refinancing allows you to consolidate your existing debts, especially the high interest debts, into your mortgage. Since your mortgage is a secured loan, the rates will be significantly lower than unsecured consolidation loans.
Contact me for more information and we’ll build a comprehensive strategy together, regardless of your reasons for refinancing.