Mortgage refinancing allows homeowners to pull equity from their home and use the money for any number of things including renovations, debt consolidation, investments and even college tuition. Mortgage refinancing can also be worthwhile when your mortgage rate is high and you would like to take advantage of the lower rates in the market.
Here are a few of the options you have when considering doing a refinance:
Renovations
updating a home is a great way to increase its market appeal as well as its value
financing renovations through a construction loan or line of credit can leave you burdened with high monthly payments and no sign of being free of these high interest obligations
by refinancing your house to fund a renovation project, you are borrowing against the property that you’re investing in, keeping everything under the same roof and simplifying your monthly debt obligations
a renovation project is also a great way to extend the usability of a home instead of having to move
Consolidate Debt
sometimes the expenses of life overwhelm us and debt accumulates quicker than we had thought possible. Often it isn’t until the monthly debt obligation becomes difficult to handle that we realize hitting the reset button is needed
by refinancing the mortgage and paying off debts, you consolidate your debt into the mortgage payment, reducing your monthly debt obligations and putting a stop to the never-ending interest charges incurred through lines of credit and credit cards
by reducing your monthly debt obligations, you have more funds available for managing your financial situation and even paying down your mortgage more quickly
Getting a Better Mortgage Rate
if the rates are significantly lower than your current interest rate, it can be worthwhile to investigate whether or not breaking your current mortgage and taking on the current market rates will be beneficial
in some situations, our client’s have saved upwards of $10,000 in interest by breaking their mortgage, paying the penalty and taking a lower interest rate
When refinancing, legal fees will be incurred as the mortgage must be re-registered by a lawyer.
