When Should You Refinance Your Mortgage?
Refinancing your mortgage is when you break your current mortgage in order to get a new one. There are many reasons why you as a homeowner might consider doing this. The following are some examples of when you might want to refinance your mortgage.
- When interest rates have dropped.
The less interest that you have to pay on your mortgage, the faster you will be able to pay it off. If mortgage rates have gone down considerably since your mortgage term started, you may be able to save thousands of dollars over the life of your mortgage if you can refinance to a lower rate.
- You want to consolidate your debt.
Perhaps the most common reason why people refinance their mortgages is to consolidate debt. If you have high-interest debt from credit cards, car payments, student loans and so forth, you may be able to dramatically reduce your interest rate if you are able to consolidate these loans by refinancing them.
When you refinance in order to consolidate debt, you will need to have sufficient equity in your home to pay off your other debts. Your new mortgage will be higher because your debts will be rolled into it however, you can save quite a lot of money over time since your interest rates will be lowered.
- You want to pay off your home faster.
Another reason for refinancing is that you now find yourself in a better financial situation than you were in when you started the term of your current mortgage. Perhaps you have paid off some debt or got a promotion at work and are earning more money. If you would like to use that extra wealth to pay down your mortgage faster, you may wish to refinance so that you can pay more each month on your mortgage.
- You want to switch to a variable rate or to a fixed rate.
When you got your current mortgage, you had to choose between a fixed rate and a variable rate. While your decision may have made sense at the time, perhaps your circumstances have changed and you would like to switch. If this is the case, it may make sense to refinance.
Contact Matrix Mortgage Global Today
Refinancing your mortgage can make a lot of sense under the right circumstances. If you think this may be the right decision for you, contact Matrix Mortgage Global today to speak with one of our experts.