Refinancing might be a good option to pull out equity to consolidate higher-interest debt, home improvements, investments, life changes that alter your finances, and more.
The first and most important thing to understand about mortgage refinancing is that if you opt to refinance during your current mortgage term, it is considered to be breaking your mortgage agreement. As with any contract, there are associated penalties for breaking them and it could end up being quite costly. If at all possible, it is always best to wait until the end of the mortgage term before any refinancing is conducted.
Beyond the penalties, there are a few additional things to know about mortgage refinancing such as:
- It allows you to tap into equity up to 80% of the value of your home.
- It requires re-qualification under the current rates and rules, which includes passing the “stress test” again
- No default insurance is required, which could give you more lender options
- There is typically an appraisal cost and legal fees for the new mortgage agreement
Refinancing can provide you access to even better rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy.
Contact me today — let’s crunch the numbers and see if if it makes sense for you.