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Refinance Your Mortgage

Averbach Mortgages Refinancing

There are many reasons you may decide to refinance your mortgage. Whether you desire to use the equity in your home or apply for a new mortgage to consolidate debt, remodel or upgrade your home, reduce your current mortgage interest rate, or some other purpose, you have many options to consider and compare.

Before you decide which method you will use to refinance your mortgage, you will want to compare each method against the cost of "doing nothing." In other words, make sure you'll reap an actual benefit large enough to justify your decision to refinance.

If you have enough equity earned in your current home, you may decide to borrow against the equity to pay for remodeling or upgrading your current home or pay off high interest debt like credit cards or other loans, or use the money for a down payment on an investment property or for a business start-up.

If your original mortgage terms included a high interest rate, you may decide to refinance your mortgage to get a new mortgage with a lower interest rate or other advantageous terms and borrow enough additional to pay off high interest debt.

Refinancing an existing loan can have some drawbacks as well. Some loans have prepayment or early payoff penalties that can be rather substantial. Sometimes lenders will allow you to include the penalty amount in your new loan. If you refinance using the same lender, they may even waive the penalty altogether. It never hurts to ask!

Averbach Mortgages Refinancing

Your decision to refinance may be influenced by your belief that mortgage rates will increase or decrease in the near future. If you have observed rates have been on the decline, you may want to switch from a fixed rate to a variable rate mortgage loan with an interest rate cap. If rates have been going up, you may feel more comfortable switching from a variable rate to a fixed rate.

If the purpose of your decision to refinance your mortgage is to make home renovations or upgrade, remember if you're making the improvements to increase future market value of your home, the more recent the renovation, the highest return on investment you'll receive. Kitchens, bathrooms and outdoor living areas like decks or sunrooms yield the greatest rate of return on your investment. Keep in mind the other houses in your price range. You don't want to make such dramatic improvements that you price your home out of the market!

In any case, before you decide to cash out your existing equity or refinance your mortgage, it's a good idea to consult a mortgage expert to help you weigh the pros and cons of each option.

The Averbach Mortgages team of professional consultants will give you honest advice and will help you find the best mortgage for your needs.