Home Mortgage Refinancing Process
“When Is It The Best Time To Refinance Your Mortgage?”
With interest rates still sitting at near record lows, consumers are always wondering if they opt for home mortgage refinancing.
Many home owners with variable rate mortgages have already locked into longer terms due to the fact that the cost of refinancing is negligible when no prepayment costs are involved.
At the same time, there are still many variable rate holders that are taking advantage of the low open mortgage rates and will likely continue to do so until rates go up. Some of these individuals may even be waiting to see if there is a further drop before even considering locking in longer term.
And what do you do when you have a fixed term mortgage that does carry a prepayment penalty when the existing mortgage is paid out prior to the end of the interest term?
The possible scenarios that you can consider are almost endless.
And remember that there is no one best approach. Choosing an interest term has everything to do with your own risk tolerance and your view of how you see the economy moving in the future.
When considering going through a home refinancing process, there are a few things to keep in mind.
First, make sure that you have all the facts related to your existing mortgage with respect to the existing interest term, prepayment penalties, and conversion options. If you have a fixed term mortgage, ask your mortgage lender to provide you with a calculation of the prepayment penalty so that you have something official to go by.
Second, review the existing market rates and related interest terms to gain a good understanding of what’s available to you with a new mortgage. Remember that rates will continually fluctuate in the market and among lenders, so any exercise you go through today will have to be updated in the future to reflect potential rate changes.
Third, and perhaps most important, go through the potential scenarios you are interested and calculate the projected benefit to see what makes the most sense with respect to your beliefs regarding rate movements in the future and the current costs associated with paying out your existing mortgage and getting a new one in place. In the end, this is a dollars and cents exercise with the goal to save money in your financing costs over time.
The best way to approach the home mortgage refinancing process is to give myself or another mortgage broker a call to answer all your questions and to go through different scenarios with you. This is definitely a case where a mortgage broker can add a great deal of value to your decision making process and help you come up with a plan of action you’re coming to be satisfied with for years to come.
Click Here To Speak With Mortgage Broker, and Refinancing Expert, Joe Walsh
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel