Refinancing a mortgage means rolling over a current mortgage into a new loan. It allows you to reassess your home’s current market value and apply for a new loan with new terms. If your application is successful, your lender will present various offers to lower your monthly payment, take equity out on your home, or reduce the number of years on your home loan.
Why Should You Refinance Your Mortgage?
Saving money is the biggest reason to refinance a mortgage. By doing it, the homeowner can have a lower interest rate or eliminate the private mortgage insurance payment from the loan amount.
Another reason is to unlock some of the equity of your home. The money produced through this move can be used to pay off high-interest debt or invest it back into your home through remodeling projects.
Refinancing can speed up the repayment term of your home loan. By shaving a few years off, you can unlock more equity faster or walk away with more money if you decide to sell off your home.
Benefits of Refinancing Your Mortgage
Most of the benefits revolve around reducing your monthly payments. A new mortgage can have a shorter term, stabilize your payments with a fixed interest rate, or help you acquire equity built up in your home.
It can also reduce your costs through lower interest rates, lower monthly payments, the elimination of PMI, the shortening or lengthening of mortgage length, conversion to fixed rates, and taking out money from equity.
How to Refinance Your Mortgage
Set a Goal for Your Mortgage Refinance
You must have a goal in anything you’d like to pursue. In this case, are you trying to save money? Or are you going to take out cash to resolve another debt? By setting a goal, you’ll know exactly what to do and the route you’ll need to get there.
Check Your Credit Score
It is a transaction involving credit. You should know exactly where you stand before speaking with lenders. Doing a credit check beforehand allows you to be ahead and understand the lenders’ next move. It is also an opportunity to fix any erroneous information before asking for rates. A bad credit score can still allow you to refinance, but with less than stellar rates.
Select a Mortgage Refinance Lender and Lock Your Refinance Rate
Shop around for the best lender with the most fantastic offers for refinancing. Once you’re satisfied with their request, lock your rate with them. As soon as you’ve made up your mind, consider refinancing right away as mortgage rates change daily.
Prepare to Close Your Refinanced Loan
After “locking in,” the next step is to take care of the paperwork. Ensure that everything has been verified before submitting all the information. A house appraisal may also be needed, depending on the specifics of your refinance. The rates can reach $400 and above.
Attend the Mortgage Refinance Closing
Finally, sign above the dotted line. Close your paperwork and take full advantage of your refinance. Be prepared with a government-issued photo ID and the cash needed to close. An advanced wire transfer to the bank is also a great move.
Regardless of your reasons, refinancing a mortgage is a financial move you should consider. It is a simple way to earn, save up, or lessen your monthly payments. The extra cash can go a long way. Use it wisely and improve your living situation, one mortgage at a time.
ACB Mortgage Solutions is a brokerage firm that specializes in mortgage solutions. Whether you’re looking to purchase, refinance, get equity on a property, renovate, build, or invest in a property, we can find ways to make it work. Schedule an appointment today, and let us help you attain financial freedom.