Maybe you feel you have compelling reasons to justify refinancing your mortgage. Before you decide, you need to research some fundamental issues surrounding the many options open to you.
First, should you be refinancing your mortgage at all? Look at your own situation carefully. True, there are occasions where refinancing may benefit you by saving money over time, but you must do the calculations carefully before deciding on any debt consolidation. There are several useful calculators on our site where you can figure out the costs involved with refinancing your loan – enabling you to make your own financial simulations. Use them, and check yourself meticulously too.
Next, be aware of the dangers of mortgage refinancing. As in any industry there are some dubious operators in the mortgage broking sector and some have their own agendas way above your needs on their list of priorities. Look at the many offerings out there on the internet and draw some comparisons before finally deciding.
Understand the different mortgage refinance loan options available on the market. Home loans come in many offerings and each home loan type targets a specific market niche. To decide which product offering best suits you will depend entirely on your personal situation, and your perceived needs to seek out a mortgage refinance option too. For example, you may require flexibility over stability in terms of the interest rate options – evaluate and understand your needs carefully before signing contracts.
Appoint a professional broker well versed in the intricacies of a refinancing situation. Check out a mortgage lender for professional registration and good standing and ask around, or do some research via the internet on the company concerned. Make sure that you feel comfortable with your financial advisor otherwise you could end up with unwanted worries that you could have done without!
Choose the right time for refinancing, for example, when interest rates start to fall, or when your own financial circumstances have changed. Move cautiously though, and consider the variables carefully. How long do you intend staying in your present home and how would you use your equity in future?
Consider how refinance can support, or undermine your overall financial aims. Once you have confirmed that refinancing is for you, bear in mind that as you go ahead you are effectively replacing your mortgage with a new loan product. You can expect to go through the process as if you were first starting out with your first home loan, but the benefits are potentially fantastic.
• Reduce your monthly payments with lower interest rates or an extended repayment period
• Lower your interest rate risk through switching products.
• Shorten your loan term and reduce interest costs over the life of the loan
• Accelerate your equity build up by paying off your mortgage faster and shortening the term
• Release equity to provide funds for debt consolidation.
Remember, when interested in refinancing a mortgage – be sure to conduct comprehensive research until you have the correct answers that should enable you to make an informed decision.