An Overview of the Mortgage Refinancing Process
A pre-approved mortgage will indicate to you the value of the home you may be eligible to afford, as well as the payments associated with various purchase prices.
It can also guarantee your mortgage rate for certain period of time to protect you from possible rate increases. You are not obligated to the mortgage broker or the bank to whom you got the pre-approval for your mortgage.
There is no cost associated with this either so there are limited risks associated with getting a pre-approval.
3 Reasons You Might Want to Refinance Your Mortgage
There are three primary reasons why you may wish to look into mortgage refinancing. These include:
- Taking advantage of low interest rates.
- Getting access to cash in the home.
- Consolidating debt.
There are also several methods available to you if you wish to move forward with mortgage refinancing. These include:
- Adding a home equity line of credit.
- Breaking your current mortgage contract early.
- Blending or extending your existing mortgage.
The cost of mortgage refinancing will depend a great deal on the strategy that you use to lower your interest rate or to access equity.
You may incur legal costs as a lawyer may have to charge you for changing the financing on your title. In the event that your mortgage balance is higher than $200,000, the vast majority of lenders and brokers will cover this cross.
If you are tracking your mortgage in the middle of the term in order to lower your interest rate you could be charged a pre-payment penalty. This could be significant, so it is important to investigate well in advance.