Why should you consider refinancing your mortgage?
Are you looking to complete an upcoming renovation, or to consolidate some credit card debt? Refinancing your mortgage to do so may be the solution to either of these scenarios as interest rates on other loans are typically much higher.
What are the different options?
The three most common ways of using your home equity to get extra financing before the end of your current term are:
- Refinancing
- Home equity line of credit
- Second Mortgages
The benefit of using one of these options rather than another kind of loan, such as a personal loan or a credit card, is that interest rates on loans secured with home equity can be much lower.
Refinancing
Some mortgage lenders offer their customers refinancing options. This allows home owners to access the equity in their home that they’ve built up over time, by paying down their mortgage principal. Refinancing may involve changing the terms of your original mortgage agreement, and the refinanced portion may have a different interest rate than the original mortgage. You may have to pay fees in order to do this.
You can borrow up to 80 percent of the appraised value of your home, minus the amount left to pay on your first mortgage.
Click here to learn more about the other refinancing options available.