What you should know before refinancing your mortgage
If you’ve been paying off your home for a while, you may be interested in refinancing your mortgage. Mortgage refinancing gives homeowners the opportunity to tap into the equity they’ve built up and use it in a way to positively change loan conditions or invest back into the property itself.
What is mortgage refinancing?
When you replace your old home loan by paying it off with a new one, you refinance your mortgage. Benefits include switching insurance rates (Example: from an adjustable rate to a fixed rate), shorten the term of the loan or even decrease the loan interest rate.
In addition to home improvements, with cash out refinance, you can turn your built-up equity into cash.
Find out how much equity you have in your home
Speaking with your mortgage lender, you can check how much equity you’ve built up on your home. This amount is made of the money you’ve paid back towards the balance of the property.
For example, if the value of your home is $400,000, and you owe $300,000, you would have $100,000 of equity.
Prepare your documents and apply
Once you’re ready for a mortgage refinance, you’ll need to gather documents to apply. These documents include, but are not limited to:
- Tax statements.
- Salary info.
- Copy of homeowners insurance policy.
- Etc.
Once all needed signatures and loan conditions are met, you’re given a cooling-off period of 3 days to retract your mortgage refinance request. In this case, you would just continue making your normal monthly payments on your original mortgage.
Refinancing your mortgage is a huge step, so consider taking your time to weigh out the pros and cons.
About the Author
Michelle Plunkett, Associate Broker
It's simple, really. Help people. Each client is unique. Every situation deserves special attention. Each home, neighborhood and community is a perfect fit for someone. Whether you are part of a grieving family settling an estate, 1st time home buyer, Upsizing, simplifying or find yourself starting a new life chapter, I am eager to understand your needs, provide you with options, guide you along and help you to make insightful, shrewd decisions. What journey do you find yourself embarking on? I would love to share the adventure with you - keeping it exciting, fun and rewarding! I am a FULL TIME Realtor - working my schedule to fit with your lifestyle and adapting to your technological abilities. Together we can make it happen! In appreciation for your business and in keeping with the spirit of thankfulness to the community that has supported me along the way, a portion of each commission is donated to charity.
