What are the main types of Property Refinance?
- Cash-out refinancing
- Rate and term refinancing
- Reverse mortgage
When should someone sit down and refinance?
Borrowers should sit down to consider refinancing their homes if they are faced with some financial challenges. Furthermore, if borrowers are in an emergency with the property – the roof needs to be repaired etc. Apart from this, consider a refinance if the rates are increasing or the term is up for renewal and you want to lock in a rate early before the increases.
Where does a client need to go to get a refinance done?
A borrower can do their refinance with their original lender. Additionally, borrowers can also compare their options from the lender with a local mortgage brokerage. The mortgage broker can look and research the best rate. A one-stop shop solution.
How does it affect someone’s mortgage when they refinance?
Refinancing a mortgage can affect your mortgage if you are breaking a term early. Breaking the term early can cause high penalties if you’re in a fixed rate and there is a significant amount of time left on your term. If you are refinancing for a higher rate the penalty may not be so high, but there are still costs to refinancing. Typically refinances can
- affect your mortgage by adding time to have it paid down.
- increase your payments or in some cases decreases your payments.
- alter your mortgage rates if the rate is higher or lower at the time.
Why should a client refinance their mortgage?
Clients should sit down to perform a refinance. Typically, a refinance is a good solution to consolidate some debts or complete renovations to increase property value. A client can do a refinance to take equity out of the home to gift to a family member looking to buy their own home and might not have enough down payment. Also, borrowers can perform a refinance as a reverse mortgage if they are retired and need money.
