When to Refinance Mortgage…
-If you can get an interest rate that is lower than what you currently
have. How much lower? At least 1.10 percent or higher.
-You are planning to stay at least another 4 to 5 years in your house to
the make the refinance worthwhile.
-Because there are fees attached to the refinance process, you want to
make sure you will be able to cover these new costs.
-Is your mortgage monthly payment reduced or not? With a lower
interest rate it should be.
-Are you in a financial crisis? If you are, it can soon ruin your
credit history profile and you may think refinancing is not justifiable.
With the above factors, find out if your lender will penalize you by
paying off your first mortgage through the refinance before the due date or maturity date. This is
called the prepayment penalty.
Advantages of Refinancing
 Lower Monthly Mortgage
Payment
When you refinance your first mortgage with a lower interest rate the
monthly payment for the new loan usually goes lower. That way you can save more money to use for
other personal expenses.
Building up Equity
Depending on the period of your refinancing, the sooner you pay off the
loan the faster you will build equity. And in that case you will probably have the same or higher
monthly payment.
Consolidating Your Debt
Putting all your loans in one place is much better, safer, and most likely
cheaper assuming you obtained a lower interest rate. Paying off monthly loans here and there can
lead to the following:
-While paying off one loan at a time, you might be missing a payment due
date with another
-Credit cards loans usually have high interest rates so consolidating them
under one bank with much lower a interest rate is the way to go.
Having Extra Cash Money
Many banks or lenders are willing to refinance you with more money than
what you owe for your mortgage. So the extra money can be used for personal use, business purposes,
or just paying off a high interest charge on credit cards.
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Remortgage
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