Now is the best time so far to take advantage of the equity you’ve built in your home. How so? Because mortgage rates have been low and steady in recent years, that’s why!
Today’s market presents you with good rates with no indication of sudden change. If you don’t think these days is a great time to refinance your mortgage, below are 3 smart reasons why you should consider it.
You Want to Make Use of Your Equity
Because our housing market has been steadily making a comeback over the last few years, it is a given that home values are also at an upward trend. This means that the equity you are gaining on your home is also climbing at a faster and more favourable rate.
The above situation places you at a particular advantage if you decide to take cash out of your home’s equity. More equity means you can borrow more against the equity you’ve built up, which means financial flexibility for you.
You can use your home’s equity to finance a home remodeling or home renovation. This smart move will pay back in the future because renovations have a huge potential for further increasing your home’s value. You can also use your home’s equity to catch up on loans by using it to consolidate debt or perhaps use it to finance a business or your child’s college education.
You Want to Shorten Your Term
Refinancing is the way to go if you want to shorten your existing term. This would of course, mean higher monthly payments from you as opposed to a longer term such as 20 years or 30 years. The good news is, opting for a shorter term will usually mean a lower interest rate which means savings in the long run.
Note that investors and lenders like it when you are willing to go for a shorter term loan because it means that they can get back their money sooner. If you have the means to afford high monthly payments, going for a shorter term is really a smart thing to do.
You Want to Lower Your Payment
Refinancing can lower your payment a couple of ways. If you opt to refinance to a longer term, you will end up with lower monthly payments that is within your means. If you refinance to shorten your term, then the lower interest rate will lower your total payment once everything has been paid.
Things aren’t as simple as described above though. There are technicalities which you have to be wary of and details that are best handled by professionals who have your best interest at heart. Some lenders may include pitfalls in their contracts and you have to know how to avoid those.
Are you thinking of refinancing your mortgage to tap on your home’s equity, lower your payment, or perhaps save on interest? Let us help you at Homebase Mortgages. Our professional loan experts would be more than happy to answer your questions and assist you towards better financial management. Contact us today for answers!