Thinking of refinancing your property? You’re making the right move. We’ve talked about why it’s a good idea below, as well as diving a bit into what “refinancing” really is.
What is Refinancing?
Before we dive in, let’s talk about what refinancing is. It’s basically when a bank or finance company buys out the mortgage you have on your property.
Be careful of who you work with. Centum Financial Mortgage group is a name that’s worth your while. You want someone that won’t make you stuck with interest rates higher than before.
Let’s dive a bit into the pros and cons of refinancing your mortgage. A major pro not many people realize, is that if the refinanced loan is larger than the mortgage, the remaining cash would come to your hands. You can use it for whatever you want.
Lower Interest Rate
When did you take your mortgage out? When it was approved, the interest rates around might’ve been high. It’s now been a couple of years and they are significantly lower. By refinancing, you’ll be making use of the current lower interest rates, paying much less.
Of course, the rates differ per finance company or bank you’re working with. Remember to look around to snag the best deal.
When you first took the loan, your credit score might’ve not been that good. This would’ve resulted in an interest rate higher than what you’d get now – your credit score is currently superb.
Lower Monthly Payments
When going for the new loan, you could go for a payment period that would be longer than the original. This would result in the primary payments every month being more affordable.
Who you’re working with affects how far back you can choose your pay-out date. If you have a good salary and have been at the bank for a while, you could be eligible for getting an extension others wouldn’t get.
There are two main types of mortgages around. You could go for a fixed-rate or an adjustable rate option. Your original loan may have been the latter, which means the sum you had to pay each month differed. The second refinanced loan you took out could be a fixed rate one. This’d result in you knowing exactly how much you’d have to pay each month.
Get Rid of Debt
The cash you’d receive can be used to get rid of other debt, not just your original mortgage. Remember that home loans have large payment periods. The interest rates on them are low in comparison to credit cards and other means of borrowing.
If you need to pay a debit card off, you could refinance your mortgage for a larger sum, putting payment date further into the future. You’ll be able to settle the debts while not paying a lot in return anymore.
Remove Someone from the Mortgage
Unfortunately, you’re going through a divorce. Your ex’s name was on the mortgage. You don’t have to worry if you refinance it; you could just add your name or someone else’s.