Should you remortgage your home?
There are some good reasons to remortgage your home.
If you are already a home owner you know it is very expensive to maintain your home.
With expenses such as taxes, insurance and maintenance costs just to name a few, you have to conserve every penny you can.
So lowering your payment by remortgaging your home would be very appealing.
If interest rates are lower, if you could combine your first and second or if you have enough equity to be able to remove your mortgage insurance, then the time might be right for you to remortgage your house.
However, just be cause you have a good reason to remortgage your home doesn’t mean it makes good financial sense to do it.
There are many fees involved in a remortgage that either you have to pay at closing or it has to be attached to the back of your loan.
Knowing this, you have to factor in all the costs before remortgaging your house.
A general rule is, if you can lower your interest rate by at least 2% and pay off all the costs associated with the remortgage in the first few years then it may be ok for you to remortgage.
Lets look at a few reasons why you might want to remortgage your home.
Lower your monthly payment and have the loan paid off in the same time or less.
If you have a adjustable rate mortgage and you can stream line it at no or low cost, to a fixed rate, before your payments adjust up.
You have mortgage insurance on your current loan and have at least 20% equity, you may be able to remortgage to remove the insurance costs off your loan which will save you money over the life of the loan and lower your monthly payment.
If you have a first and second and can combine the two with a fixed rate mortgage, with a lower monthly payment and without increasing the length of the loan.
Now lets look at a few reasons not to remortgage your home.
Just to pull out cash to go on vacation, buy a boat or some other unnecessary purchase.
If the remortgage extends the life of your loan, for example, if you had 15 years left to pay off your loan don’t remortgage for another 30 years.
Try to stay away from adjustable rate mortgages, seconds, points and origination fees.
Hope this remortgage advice helps you make the right decision, however it is just my opinion based on my experience, please seek legal advice.