Some people secure a mortgage and stick with the same one until the home is paid for in full. Others find that they can do better later on and make a change. Depending on the nature of the change, the result can be quite beneficial.
When should you refinance your mortgage? Ultimately, you’re the only one who can make that call. Here are some examples of what has motivated others to refinance an existing mortgage. One of these may apply to you.
You Stand a Chance of Locking in a Better Interest Rate
All sorts of changes can happen over the years. Some of them may influence the type of mortgage deal that you could lock in. For example, your credit scores today may be much better than they were ten years ago. It never hurts to see what type of interest rate you could command with that improved credit. If you find that the rates on a refinanced mortgage would be much better than what you’re paying now, it makes sense to make a change.
A Different Lender May Assess Fewer Fees and Charges
Another point to ponder is the ongoing fees and charges that you currently pay. Do all lenders assess the same fees? Not necessarily. You could find that quite a bit of your monthly mortgage payment is going to cover charges that other lenders do not bundle into the mix.
The only way to know if you have the best mortgage terms is to compare them with what other lenders can provide. This process is especially easy when you make the most of what the local Toronto Clover Mortgage brokers have to offer. You could come across a refinancing option that provides a lower rate of interest and streamlines the fees and charges that you currently pay.
Refinancing May Provide More Affordable Mortgage Payments
How comfortable are you with the current amount of each monthly installment payment? If you would like to look into lowering the payment a bit, it never hurts to see what refinancing could accomplish. Depending on how much you still owe on the current mortgage, refinancing could allow you to enjoy lower payments and free up more of your monthly income. If the interest rate and various fees happen to be lower, you may still be able to retire the entire debt near the settlement date of the original mortgage.
You Could End Up Retiring the Mortgage Sooner Rather Than Later
Here’s something to consider closely: refinancing could allow you to pay off the mortgage in less time. A lot depends on how the refinancing is structured. A combination of a better interest rate and fewer fees will help. If your income allows you to pay slightly higher payments, you could shave several years off the mortgage term. Think of how nice it would be to pay off the house well before you originally planned and be able to route those funds to some sort of interest bearing account.
Even if you’re not sure about refinancing right now, it costs nothing to explore your options. If that results in coming across a deal that would benefit you significantly, give refinancing some serious thought. It could turn out to be a decision that serves you well in the years to come.