Want to refinance your existing mortgage? With the interest rates witnessing constant rate cuts, now is the best time to refinance a mortgage in Abbotsford. You may choose to refinance your mortgage to secure better loan terms, lower your monthly payments, or tap into your home equity. The refinancing process is quite similar to applying a mortgage when you originally bought the home.
If you’re ready to refinance, check out the following refinancing tips that can help you stay prepared and save you thousands of dollars in coming years.
- Determine Your Refinancing Goals
The foremost step in your refinancing journey is deciding why and when you want to refinance an existing mortgage. Once you are sure what your goals are and how you want to accomplish them, it’s time to choose your mortgage type and flexible loan terms. Some of the common reasons to refinance include:
- Lower monthly payments
- Lower interest rate
- Shorter loan term
- Switching to different mortgage type
- Getting rid of mortgage insurance
- Research Different Types of Refinances
Depending on your refinancing needs, you can choose the right one from various types of refinancing options available. Research your options to find the best fit for your situation. Some of the common refinancing types include:
- Rate-And-Term Refinance
- Cash-Out Refinance
- Cash-In Refinance
- Streamline Refinance
- No-Closing-Cost Refinance
- Improve Your Credit Score
Credit score plays a significant role in determining the interest rates and loan terms you’ll get. Before applying for a refinance, it is advised to get your credit score checked. The credit score requirements vary depending on the type of loan and lender you choose to work with. Some steps to improve your credit score include:
- Pay your bills on time
- Avoid applying for any new loans or credit cards
- Reduce Your Debt-To-Income (DTI) Ratio
Debt-to-income (DTI) ratio refers to the percentage of your gross monthly income that goes toward debt payments or consolidation. When you apply for a refinance, lenders will look for your DTI ratio. An ideal DTI ratio should be no higher than 43%. In case you have a higher debt to income ratio, you can lower it by paying off your debt or creating additional income streams.
If you are looking for a dependable mortgage broker in Abbotsford to get your refinancing needs sorted, rely on none other than Sandhu & Sran Mortgages. We specialize in all sorts of mortgage approval, right from residential to commercial mortgage and mortgage renewal to refinancing and anything in between. Contact us today to get started with your mortgage application and we’ll leave no stone unturned to get your mortgage approved at the lowest interest rate possible.