When you obtain a mortgage to buy an asset, you now have the key to unlock other financial ventures such as refinancing your mortgage. To refinance a mortgage means to get yourself a new mortgage on better terms. This often happens when the interest rates for the current mortgage drops or you have paid back a sufficient amount of your existing mortgage. In order to check if you can do it, your loan-to-value ratio can be calculated by mortgage calculator. If you are looking for a trusted mortgage agent who can guide you about your mortgage options, you must contact Shant Nalbandian who will provide FREE initial consultation. An agent will let you know if you can refinance your mortgage or not based on your current financial state. In this article you will learn 07 core benefits of mortgage refinance.
1. Utilize Home Equity
Over time, house that you buy often improves its market value due to renovations you made or improvements in the neighborhood. This market value is known as home equity, although you can use it to refinance your mortgage. Many people do not realize this, but you can actually pay for the renovations you plan to do in your new home using home equity that your house gained over time, through HELOC (Home equity line of credit). You can now use up to 80% of your home equity if you have less outstanding mortgage debts than the market price for your home. You can get to know more about home equity at (416) 894-3976.
2. Shorten Mortgage Term
A term is the time period during which a fixed interest rate is applied, with a new term this rate may change. You can shorten your term when the interest rates drop by refinancing your mortgage.
3. Reduced Interest Rate
One of the major benefits of mortgage refinance is to reduce the interest rate on your mortgage by refinancing it. This way, the pay off date can be extended or your interest rates can get reduced by utilizing home equity your house built over time. This further helps to build your home equity fast as you will pay off your mortgage in less time now.
4. Reduced Monthly Payments
Monthly payments are defined by factors such as down payments, interest rate for a term and etc. When you refinance your mortgage, you are able to decrease your interest rate and that in return reduces the monthly payments that you have to make. This also helps you improve your credit score since you will be on time with your mortgage payments without struggling financially.
5. Debt Consolidation
One of the many perks of mortgage refinance is debt consolidation, which is a financial relief process that allows you to pay off your debts through mortgages and once you refinance your mortgage, you now have the financial liberty to manage your health emergencies or child’s education funding.
6. Merging Mortgages
If you got two mortgages, then it’s possible to combine them both into one through mortgage refinancing. This lets you deal with both the mortgages as single and you get a new repayment plan or schedule. You can learn more about merging mortgage and its approval process here.
7. Pay the Mortgage Sooner
The number one advantage you get via refinancing your mortgage is, getting you rid of the mortgage before the expected time period. This will improve your credit score as well as free you of the mounting mortgage installments that you have to pay back by decreased interest rate and monthly payments.
If you wish to know more about the benefits of mortgage refinance, you can work with a professional agent who can guide you through all available options for your specific financial situations. You can get best mortgage rates at Shant Nalbandian who is connected with over 60 lenders in Ontario Canada. Whether its second mortgage or refinancing your mortgage, Shant and his team work passionately to deliver satisfying services.