Your home is your biggest investment, and mortgage refinancing is one way you can use your home to leverage that investment. However, there are several reasons why you should consider refinancing your mortgage; this includes getting cash from your home, reducing your payment, and shortening your loan term. So it’s important to know what exactly is mortgage refinancing and how refinancing a mortgage works before applying.
What Exactly Is Mortgage Refinancing?
Mortgage refinancing involves getting or applying for a new loan to replace an existing loan. When you refinance your mortgage, you’re switching your current mortgage for a newer one with new terms. Your lender then uses the newer mortgage to clear the old loan, so you’re only left with just a new loan.
How Does Refinancing A Mortgage Work?
The refinancing process is often less complex, although it includes many steps. Like when you first bought your home, refinancing your mortgage involves processing fees, application fees, and closing costs. After you’ve applied for the refinancing, you’ll enter the underwriting process. This process may include a home appraisal to calculate your property value and equity.
You will be asked to provide proof of income, assets via bank statements, and proof of citizenship. Once the underwriters approve your application, you’ll begin the closing process and pay your closing costs. You will be able to trade your old loan for a new mortgage. After you refinance, you’ll receive a different repayment term, monthly payment, and interest rate.
Why Should I Refinance My Mortgage?
You need to consider so many things when deciding if you should refinance your mortgage. It would help if you think about your market trends and financial health, and you also need to know how refinancing differs from other mortgage options.
So when deciding whether to refinance, try to figure out the monthly savings after refinancing. From here, you can decide whether the cost savings is worth it. Since refinancing involve replacing old loan-and requires re-applying for a new loan, we urge you to wait until you’re in an excellent financial situation. This involves having a strong credit score to qualify for a low mortgage interest rate.
What Are The Benefits Of Mortgage Refinancing?
There are many benefits to refinancing your mortgage, but they will vary based on your present financial situation. The number one benefit of mortgage refinancing is cost savings, but there are many others.
Refinancing can provide you with the opportunity to pay off your loan quicker, lower your monthly payments, build equity faster, consolidate other debts by combining them all into a new mortgage, and reduce your overall interest rate.
Contact The Mortgage Group (TMG) For Mortgage Refinancing Whitby
Refinancing your mortgage is not simple, but it doesn’t have to be overwhelming. Here at The Mortgage Group (TMG), we can help you get started and determine if refinancing is the right move. If you need help with refinancing your mortgage in Whitby, Toronto, please give us a call at 289-314-8786 to discuss mortgage needs.
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