With talk about interest rates lowering even further, many homeowners are wondering if it’s time to refinance their mortgages to take advantage of lower rates.
The reasons can be endless.
If the interest rate savings on a refinance outweigh the cost of the prepayment penalty, then it might be worth pursuing a refinance. (Also keep in mind that you’d need to have built up at least 20 per cent equity as you can only refinance up to 80 per cent of the value of the home.) If you don’t have the cash now to cover prepayment penalties, you can roll that cost into your mortgage balance and reap the savings of a lower interest rate. [Huffington Post]
Before you begin the process you will first want to have your mortgage professional do a cost of borrowing analysis to find out first that what you are thinking of doing makes financial sense. If at the end of the day it cost you $1000 to save $500, does that really make sense? Proper advice, planning and a good solid strategy along with proactive and on going mortgage management are key here. Be sure to contact me if you have any questions at all.
