Purchasing a home is a significant event. It is not something that you will encounter too frequently in your life, unless you are an investor in real estate. However, a lot of people eventually refinance their homes to improve their financial status and to get access to better mortgage rates. Mortgage refinancing is a common practice. Even if you first took out a thirty-year loan, those who have owned their property for thirty years are not always on their first mortgage.
The majority of borrowers have no need to consider home mortgage refinance in Abbotsford as soon as they buy a home. However, it’s wise to remember that you have the choice at all times.
The following are a few reasons people consider refinancing a home they just bought:
- Interest Rates Drop
It nearly seems obvious for you to contact your lender to discuss mortgage refinancing options if your interest rate is high, but the rates get dropped now. It is always a good idea to speak with a trusted mortgage broker in Abbotsford for more clarification on the costs vs. savings, even if the borrowed amount is smaller.
- Need Access To Money
Refinancing is an option if your home’s value exceeds your mortgage balance and you require the extra funds for various purposes such as debt consolidation, pay expenses, or other needs. Always give it some thought before taking out equity in your home. Although saving money for the future and paying off your mortgage should be your main priorities, some homeowners do take advantage of refinancing to get access to money.
- Having Financial Difficulty
Although it shouldn’t have to, some borrowers may need to shorten their loan term in order to reduce their payment when their financial condition gets tight. They can change their mortgage from a 15-year loan to a 30 or 40-year one. In this case, switching to an adjustable-rate mortgage can also be a possibility.
- Rise in Income
You might want to think about paying off your debt sooner if you earn a raise in pay or a new job. You can refinance and take out a 15- or 10-year loan if you currently have a 30-year mortgage. Since you would be repaying the loan over a shorter period of time, the payments will be larger despite the reduced interest rate.
Conclusion
Every borrower is different, and so is the borrowing scenario. You should consider speaking with an Abbotsford mortgage broker about your circumstances to find out if you should reapply or refinance for a loan.
At Sandhu & Sran Mortgages, we have years of expertise assisting customers with home purchase mortgages and refinancing. Please get in touch with us if you have any questions about refinancing or would want to talk about your circumstances. We would be more than happy to help you.