Mortgage refinance : why do it?

Why bother with mortgage refinance? You bought a home a few years ago, you're not having any trouble keeping up the monthly repayments, so why make changes? The answer is that looking again at your mortgage may save you a substantial amount of money.

A lot of mortgage lenders tempt you with attractive loan offers when you're buying a home. A typical ploy is to offer a very low rate of interest for the first couple of years, before switching to a higher rate. By the time you have to pay the higher rate, you've settled into your new place and perhaps you're earning more too. But just because you can pay a high rate of interest, that doesn't mean you should . Look at what you're currently paying and see if it's possible to get a better offer elsewhere.

Looking for a better deal on your home loan rates

Of course, many contracts require you to stick with the lender for a certain number of years. But most loan deals have an expiry date, so find out when yours is. Even after the expiry date of your particular deal, you will probably have to pay certain "penalties" for the privilege of moving your mortgage elsewhere. Although these penalties are an important consideration, don't let them put you off mortgage refinance. Instead, include them in your calculations when you're working out whether or not to move your mortgage. Go through the terms of your existing mortgage and be very clear on what you're currently committed to.

Finally, remember that mortgage refinance doesn't necessarily have to involve switching lenders. Many lenders are aware that savvy borrowers succumb to the "seven-year itch" and start looking around for better deals. Ask yours if it will offer you a better deal on your loan in order to keep you as a borrower. Getting a new deal from your existing provider may also mean that you don't have to pay redemption penalties.

 

 

 

 

 

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Mortgage Refinancing

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