Why Do People Refinance Their Mortgage?

Posted on 27th October 2016
Tags: existing loans, loan term, mortgage rates,

What does it mean to refinance your mortgage?

When you refinance a home mortgage loan, you’re paying off an existing mortgage with the help of a new mortgage. So, if you currently have one or more mortgages on your home right now, you can take up a new mortgage to pay off the existing house loans and lower your interest rates.

What are the benefits?

There are many different reasons to refinance your home mortgage loan. People refinance their current mortgages to:

  • Get a new home mortgage loan at a better rate or a lower interest rate;
  • Increase the length of the loan to reduce payments;
  • Decrease the length of the loan term in order to pay off a mortgage sooner;
  • Refinance a home to pay off debt; or
  • Increase cash flow for other purposes.

These are only a few of the benefits that refinancing your mortgage provides you with, to see more benefits click here .

As you might know, mortgage rates are changing every day. The important piece is that mortgage rates are currently low. This means that it is the perfect time to consider refinancing your mortgage as an option. The issue is that most people wait for their renewal to consider their options. However, due to the fact that interest levels are extremely low right now, you can save today by refinancing your mortgage.

If you’re currently in debt and trying to manage your mortgage, your credit score might be at risk and you might be feeling completely overwhelmed trying to manage your finances. This is when refinancing your mortgage might be the best option for you, as a “cash-out” refinance replaces the mortgage that you have with a new mortgage, while you take the difference to spend how you wish. This is a great strategy because the interest rate is lowered in the process.

What are the next steps?

If this article is convincing you that refinancing your mortgage might be the best option for you, you should talk to someone from Canadalend.com and discuss your options. While interest rates are low, it’s time to reevaluate your options and find out if refinancing your mortgage is the best option for you.

 

Sources: http://www.huffingtonpost.ca/samantha-brookes/why-refinancing-may-be-a-_b_10115262.html