Is There A Right Time To Refinance My Mortgage?
When it comes to your mortgage, there’s no right or wrong time to refinance. It all comes down to your current financial situation. If you are someone who needs extra funds to pay for a child’s education, take a vacation, plan a wedding, or deal with any other matter that requires large sums of money, then refinancing is a good idea.
Say Yes To Equity
Your home is your biggest asset. Over time, it increases in value and becomes an important source of equity. In order to access that equity, you will need to refinance your mortgage. When you refinance, you can tap into up to 85% of your home’s value, and this value can be used for whatever you need.
Consolidation Is Key
If you find yourself with more debt than you can handle. Refinancing will allow you to consolidate your debt into one monthly payment. Debts can range from car loans to lines of credit to credit card bills, and each will be rolled into one payment that will be easier to make than having to pay each separately. When you refinance to consolidate debt you may end up paying off everything quickly and avoid getting into more debt.
How to Refinance
When it comes to refinancing a mortgage you can do it several ways:
Break your existing contract:
You can do this at any time. Remember that when you break your current mortgage contract you will be taking on an entirely new one so you’ll still have to pay that off. You will also have a prepayment penalty to deal with, but oftentimes the cost of that is worth it just to refinance and access the equity in your home.
Home Equity Lines of Credit let you take advantage of your property’s equity at your own pace. HELOC’s are like credit cards in the sense that you have to make monthly payments on what you borrow.
Blend and Extend:
This means that your lender will allow you to rework your mortgage so you get a blended interest rate. A blended rate is the a mixture of your current mortgage rate plus any additional money borrowed at the existing market rates. Blended rates are usually higher than your current interest rate but you are extending your mortgage giving you extra time to pay it off.
There’s no good or bad time to refinance. It depends on where your finances are at and if you require extra funds. Contact PrivateLend.com for all your mortgage needs. Whether you have poor credit, good credit or no credit, we have the perfect mortgage package for you.