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Should You Refinance Your Mortgage?

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Have you ever heard of mortgage refinancing? Before, many people who took out a mortgage continued with it until they had completely paid it off. However, times have changed, and people now refinance their mortgages more frequently. 

If you are wondering if you should refinance your mortgage, take a look at some of the most common reasons. 

To Lower the Rate 

The top reason why people refinance their mortgage is to get a better deal. But you need to thoroughly think about this decision first. Think about the fees and charges along with the interest rate. 

In most cases, you must pay charges for exiting your current home loan. This is in addition to the charges for having a new mortgage. Evaluate if refinancing your home is better in the long run after considering all the costs involved. 

To Be More Flexible 

Many people only discover the entire details of their mortgage when it’s already too late. For example, they try to redraw (pay extra money into your mortgage and then redraw later) only to find out that it’s not possible with their basic home loan. For this reason, they refinance their mortgage to have increased flexibility, 

To Tap Extra Home Equity 

Property market houses have appreciated over the years, and the growth is quite significant. For example, a home you bought for $500,000 half a decade ago is probably worth $800,000 today. If you refinance your mortgage with a home equity, you might tap into the extra $300,000. 

To Avoid Defaulting 

There are a lot of instances when people borrow more than what they can actually repay. In this case, they are in danger of defaulting. However, you should do something about it. Talk to your Excellence Finance broker and discuss refinancing your home to make your finances more manageable.

 

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