Refinancing is changing the existing financing on your home. The changes may include:
- The amount of money borrowed
- The interest percentage rate, and whether it is fixed or variable rate
- The number of years that the mortgage is amortized for (i.e. when it will be paid off and has a zero balance)
- The term, which is the duration when the mortgage financing will mature, and renewing may be considered
- Change Lenders.
Refinancing may provide these benefits:
- Lower monthly payments which increases monthly cash flow
- Lower interest rate
- Lower total interest paid, often by many thousands of dollars
- Stabilizing payments by changing from variable to fixed rate
- One monthly payment
- Paying down your mortgage more quickly and becoming debt-free
- Increased wealth.
With today’s historically low mortgage interest rates, refinancing has become particularly more beneficial.
There may be discharge penalties and costs to be paid, which we may be able to help you with.
Refinancing may be done for several reasons: