Primer on Understanding Mortage Refinance
The COVID-19 pandemic has struck not only the major industries and businesses; it has also gravely affected some individuals and families’ capacity to stay afloat. In a time when liquid cash flow or an earnings incentive from your payables is pivotal, your advisor could help you determine the options you may take. This article will briefly discuss why it could be beneficial to consider reviewing your current mortgage liabilities.
Refinancing your mortgage loan is a common strategy used by many financial advisors and mortgage clients to manage their finances well and, ultimately, ensure you are getting the best deals from your outstanding mortgage loans.
To ensure that we are on the same page, let us do a quick refresher on what refinance means and how it works. Should you have any questions, feel free to drop them in the comment section below, or better yet, contact us so we could explain to you further this helpful strategy.
Refinance is defined by Investopedia as “…occurs when an individual or business revises the interest rate, payment schedule, and terms of a previous credit agreement. Debtors will often choose to refinance a loan agreement when the interest rate environment has substantially changed, causing potential savings on debt payments from a new agreement.”
Refinancing your mortgage can be a helpful tool to ensure your mortgage liability is on a competitive arrangement – maximizing the chances of freeing up liquid cash on your end.
So when is the best time to refinance your mortgage? Check with your financial advisor or broker the term or maturity of your outstanding loan.
While most banks and non-bank lenders would allow you to discharge an outstanding loan within the first year from the time you signed a settlement agreement, it is necessary to understand if the fees would be worth the change.
Check out with us if refinancing is an option you can take during this time. Contact us and see the suitable options for you should you consider making adjustments to your current loan.