With housing prices on the rise and mortgage rates taking a dip, homeowners are wondering if it’s the right moment to make a change. Whether you’re looking to access equity or simply secure a lower rate, refinancing, switching, or transferring your mortgage could be a smart financial move. Let’s explore your options and see if now is the perfect time for you.
How Much Can I Get with a Refinance?
Refinancing lets you replace your existing mortgage with a new one, potentially accessing up to 80% of your home’s appraised value. This extra cash can be used for renovations, debt consolidation, investments, or any other financial goals.
Key Points About Refinancing:
- Interest Rates: Rates for refinancing are typically slightly higher (0.3-0.4%) than advertised rates for new mortgages.
- Extended Amortization: Consider a longer amortization (up to 30 years) to lower monthly payments, but be aware of increased interest costs over time.
- Stress Test: You’ll need to qualify at a rate 2% higher than the actual mortgage rate.
What About Switching or Transferring?
If you’re happy with your current mortgage amount but want a better interest rate, switching or transferring to a new lender might be the answer. Some lenders even sweeten the deal with a bonus Home Equity Line of Credit (HELOC).
Weighing the Costs
If you’re refinancing or switching before your current mortgage term is up, you’ll likely face a prepayment penalty. Contact your lender to find out the exact cost. Additionally, refinancing often involves an appraisal fee (around $450) and legal fees (around $1200).
The Potential for Savings
Even with penalties and fees, refinancing or switching could lead to substantial savings over time if you can secure a significantly lower interest rate. Let’s crunch the numbers to see if it makes sense for you.
Curious if refinancing or switching is the right move for you? Contact me today at 613-551-0639 or fill out an online application. I’ll analyze your situation and help you make an informed decision.
