One of the questions I get frequently is “Can I refinance or restructure my mortgage mid-term?”
The answer is yes. I can help you decide whether that makes financial sense and provide strategies for you to consider.
Here are some common reasons why you might want to refinance your mortgage.
You could decrease your overall monthly debt payments by using the equity in your home to pay off those high-interest credit cards or unsecured loans.
If you are carrying high interest credit card debt, car loans or other personal loans, you know that it can be challenging to pay off everything that you owe. You may have those post-holiday debts hanging over your head.
If you are a homeowner and there is sufficient equity in your property, consolidating all of your debt and including it in your mortgage payment might be the right solution for you.
There are many benefits to a refinance for debt consolidation including the following:
• A much lower monthly interest rate for all of your debts
• Lower monthly payments by either securing a lower mortgage rate or by extending the mortgage term
• The comfort and convenience of making only one monthly payment instead of making multiple payments on your credit cards and other loans
• Improving your credit score by reducing the amount you owe and now being able to make all of your payments on time
• Finance a renovation or home improvements
If there is sufficient equity in your home, refinancing your existing mortgage could give you the funds to complete those improvements.
There are some benefits to refinancing rather than taking secondary financing, such as a home equity line of credit because the interest rate is fixed and you will be able to make small, consistent payments for the duration of the term—which can be up to 30 years, to pay off the debt rather carrying it on a line of credit at typically a higher interest rate.
• Invest in a revenue property or purchase a second home
Real estate can be a great investment to add to your portfolio for long term investment and to create income. Utilizing the existing equity in your primary residence could be the way to get started building your portfolio.
Not sure if refinancing is right for you? The numbers don’t lie. Let’s run them together and then you’ll have an honest, unbiased recommendation and a plan of action.
You can try my refinance calculator to get started here, or give me a call at 1-888-561-2679 for a pressure-free consultation to run the numbers.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.