Mortgage refinancing is not just the last resort option for those who are burdened with debts and have no other alternatives, as some people believe it to be. If done with careful consideration, it can, in fact, be a very powerful tool for solving your debt problems, repairing your credit rating, building equity, improving your financial situation and get the cash you need in times of emergency. Some of the reasons you should consider mortgage refinance are:
- Reduce your monthly payment: If the current interest rate is lower than when you took out the mortgage, then refinancing can reduce your monthly payment. This will lower your monthly burden and make life a litter easier.
- Pay off your mortgage faster: If there is a rise in your income or if you have come into some money, then you can clear your loans faster by switch your existing mortgage from a longer payment plan, say 30 years, to a shorter payment plan, say 15 years. This also helps you build your equity faster.
- Pay off your other debts: You can use the money from your refinanced mortgage to pay off your other debts, such as car loans, credit card bills, utility bills and other loans. Since the mortgage interest is 100% deductible, you can save a significant amount of money.
- Switch from variable to fixed rate: A variable rate mortgage often looks good initially, but the constant fluctuations can be unnerving. If the rates rise, you will have a hard time finding enough money to make your monthly payments. You can refinance to switch from a variable rate to fixed rate mortgage.
- Consolidate your debts: If you have several loans that you are finding difficult to manage, you can refinance your mortgage to consolidate your debts so that your burden will be reduced and the interest rate will also be lower.
- Improve your credit rating: Since mortgage rates are usually lower than that of credit cards and other types of loans, using the money from mortgage refinance to pay off your credit card bills and other loans often helps improve your credit rating.
- Get emergency cash: If you are in need of cash for any pressing need, such as home improvements or to pay you child’s college tuition, then refinancing your mortgage can be the best option since the interest rate is usually lower than that of other types of loans.
With so many refinancing options available, it is not easy to pick the right one without the help of a mortgage expert. If you jump into it without a lot of research and careful considerations, you can easily find yourself in a far worse situation than you were in before.
By carefully studying your current mortgage, income and other debts, our highly experienced and motivated professionals at the Mortgage Emporium can advise you on whether refinancing is the best option for you. Another reason why you should come to us is because we offer some of the lowest and most competitive rates in the market.
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