Refinancing Your Mortgage

It is a common misconception that only people about to default on their mortgage or people who are having debt issues should refinance their mortgage.  But depending on how your current mortgage is structured and what you interest rate is, you may be able to take full advantage of the lowest interest rates in history.  The are other reasons for refinancing are wanting to pay off your mortgage faster and taking equity out of your home for renovations or other household projects.

Things to think about:

• Does your current mortgage have a penalty? This is usually 3 months interest.  So if you recalculate your mortgage obligation at the new rate don’t forget to subtract this from your current mortgage obligation.
• You have to pay legal fees to register the new mortgage and will probably have to pay for a new appraisal.
• Another inportant factor is how long do you plan on staying in your home.  It takes a while to recoup the original costs and realize the saving.

The key is that your interest rate should be at least 2% points above the lowest currently available interest rate.

If you are thinking of refinancing your mortgage in 2009, I can introduce you to a Mortgage Broker who can find you the best mortgage product for your situation and discuss with you whether refinancing makes sense for your situation.