Is a mortgage refinance a good move for you?
As we move through the fall season, you may be wondering if a mortgage refinance is right for you. Refinancing can offer several benefits, but it’s important to ensure it makes sense for you and your situation. This is a big decision that requires careful consideration beforehand to avoid stress. If you think a refinance might be in your future, take a moment to consider these items!
Your changing financial needs
You may have signed your mortgage contract a few years ago, but now you have different financial needs you want to focus on. This happens all the time! As you move through your life, you can experience a change in goals, income, expenses, and a whole host of other financial items. As a result, you might want to pay off your mortgage more quickly or slowly, or adjust the size of your payments. Our situations don’t stay the same forever, so why should your mortgage product? If you’re starting to feel like your current product no longer supports your financial needs, this is a good indicator it may be the right time to refinance.
Your plans for the future
Before you refinance, you should take a moment to think about your future plans. This will impact how beneficial a refinance may be. For example, if you plan to sell your home within a few years and relocate, a mortgage refinance is likely not worth it. Since this process takes time, effort, and money, you may not be able to enjoy the full benefits of a refinance before you sell. On the other hand, maybe you want to stay in your home long-term, and you plan to take on some home renovations to increase its value and comfort. In this situation, a refinance makes more sense. You can use your home equity to access cash flow that will help pay for this process. Refinancing is not just about the here and now, but also the future.
Today’s interest rates
Interest rates shouldn’t be the only thing you consider when thinking about a refinance, but they should definitely play a role in your strategy. Depending on when you signed your mortgage, your current rate may be lower than today’s mortgage rates. Over the past couple of years, we have seen rates steadily increase. Last year, rates reached their peak, and are now starting to trend back down. If you are interested in switching to a variable-rate mortgage, you can benefit from future rate declines. However, your new starting rate may be higher than your current one. You should discuss this with your broker to determine how today’s rates impact the potential benefits of a refinance.
Is debt consolidation in your future?
If you are a homeowner struggling with debt, refinancing your mortgage to consolidate your debt may be a good move. Debt consolidation takes all of your debts and combines them into one lump sum. This means you make one monthly payment, with one interest rate. The benefit of this is the simplicity of making one regular payment, and the fact that your interest rate could be lower than some of the previous rates you were dealing with. In the long run, this will save you money on interest and allow you to use that financial wiggle room to keep yourself on track. Keep in mind that debt consolidation is a pretty major process to take on, and you should only commit to it after discussing your options with a broker.
Contact your broker!
That brings us to the last, and most important, item to keep in mind when considering a refinance. Using a mortgage broker is essential to this process! The mortgage industry can be complex and intimidating, especially for people who don’t have lots of experience in it. Letting a mortgage broker guide you will help you feel confident that you are making the right decision. We can discuss your situation and the best options for you, and work to find you the perfect lender and product. There is no downside to enlisting the help of a broker, but there is a huge risk of missing out if you don’t!
Taking on a mortgage refinance can feel a bit overwhelming, but the process is much easier when you have a clear understanding of your needs and your options. Take the time to speak with your broker, evaluate your finances and future goals, and ask any questions you have! Our mission is to get you the product you deserve and a lender who meets your needs.
If you have any questions about your mortgage, get in touch with me!