HomeHome SearchSearch MenuMenu Our productsOur products

What to know before you refinance your mortgage

by , 13 October 2014

Are you considering refinancing your mortgage? Before making a decision, it helps to take all factors into account and understand what refinancing entails.

Refinancing may seem appealing to many, but you need to know exactly what you're getting yourself into.

You should consider refinancing your mortgage in the following situations:
 
You want to lower your interest rate
 
Reducing your interest rate is one of the top reasons for refinancing. Experts recommend that you refinance if you can lower your interest rate by at least 2%. You can generally obtain a lower interest rate if the market conditions have changed favorably or because your credit score has improved.  
 
You want to increase or decrease the term of your mortgage
 
If you want to increase the term of your mortgage so you can pay less each month, or decrease the term of your mortgage and pay off your debt sooner, refinancing gives you this option. However, there are other ways to decrease the term of your mortgage, besides refinancing, such as paying more on principal each month.
 
Changing from adjustable-rate mortgage to fixed-rate mortgage
 
If you currently have an ARM (adjustable-rate mortgage) and you want to switch to a fixed-rate mortgage, then refinancing is a viable option. Converting to a fixed rate mortage will provide a lower interest rate and keep you safe from interest rate fluctuations.
 
You need cash from your home equity
 
When you refinance for a higher amount, you can receive the difference in cash. You can choose cash-out financing when you need the money for a special purpose. However, don’t forget the costs that come with this type of refinancing: you will end up having less equity in your own home.
 
Refinancing can be a good choice if you want to reduce your interest rates or the term of your loan, but don’t forget that it can also get you into more debt. Before making a decision, ask yourself how long you plan on living in the same house and calculate the savings to see if it makes sense to refinance.

********************************
Stealth income strategies to boost your income by R130,000 to R320,000 
starting today!

 
I want to make sure you earn at least an extra R100,000, or R320,000 or more from a second or third income … 

Click here now and let me show you how to build multiple streams of income and fast-track your journey to being a financially free millionaire!

********************************
 



What to know before you refinance your mortgage
Rate this article    
Note: 5 of 1 vote

Related articles



Related articles




Trending Topics