To Refinance a Mortgage ,borrowers pay off their current mortgage and replace the loan with a new mortgage agreement. There are a number of reasons why borrowers choose to refinance.
To get a better interest rate
With interest rates sitting at record low levels, many borrowers are choosing to refinance to get a better rate. A lower interest rate can decrease your monthly mortgage payment amounts, and could potentially save you thousands of dollars in the long run.
To alter the term length
If your current interest rate is high, refinancing may help you significantly shorten your mortgage term while your monthly payments stay the same or fall.
To convert to a variable or fixed-rate loan Rates for variable mortgages are falling, so you could refinance for a lower rate. On the other hand, you could refinance your variable mortgage to secure a lower rate for a fixed-mortgage while they are still at rock-bottom levels.
To access equity
Homeowners can use their home equity to cover various expenses, like education costs or credit card debt. You can also use equity to pay for home remodelling which, in many cases, in turn increases the value of your home.
To consolidate debt Borrowers can refinance a high-interest debt with a low-interest mortgage. If the debt is a result of poor spending habits, borrowers should be wary of using refinancing as a solution.
All claims, terms, and product offerings are subject to qualification and review by either bank or financial institution whichever may apply. We reserve the right to refuse an application if mortgage qualifying criteria are not met upon our or the lender’s discretion. For more information please contact us directly.
