Save Money with Mortgage Refinancing

 If you’re thinking about bringing down your monthly payments, your interest rate, and making your mortgage more manageable, mortgage refinancing could be the right choice for you. You’ll be able to save money, lower your payments, and you may even be able to pay off your mortgage much faster than you would otherwise. Here were going to talk about how it works and if it’s the right thing for you to you. Like everything else in life there are downsides – sometimes it just won’t work for your situation, and it could end up costing you big.

What Is Mortgage Refinancing?

Mortgage refinancing allows you to restructure your current mortgage – if your current mortgage lender isn’t amenable to your request, you can always find another mortgage lender who will be. It can be hard to figure out how much you should be paying your home, and that’s when you work with a mortgage broker or other mortgage professional. You’ll be able to help you understand all of your options, how much you should be paying, and if there’s a better way to go about fixing your problem.

You also be able to bring down your monthly payments, your interest rate, and you may even be able to pay off your mortgage faster than you would have before. You will have to pay closing costs, just like you did with your original mortgage, but if you’re in dire straits this can help.

So It’s Not a Loan?

Mortgage refinancing is not a loan. You’ll be working within the existing structure of your current mortgage – in some rare cases, you may have to switch lenders to get a better deal. This new lender will be buying the debt from your current lender, and you’ll want to be very attentive to what they put in the contracts. What you come this far, it’s always a great idea to get a lawyer. Let them do the heavy legal lifting!

Who Mortgage Refinancing Works for

Mortgage refinancing works for people who’re having trouble paying their payments, people who are struggling with very high interest rates, and people who may be at risk of default soon if they don’t act. If you’re only going down by one interest point, is probably won’t work for you. But if you want a real solution to your financial problems, you want to keep your mortgage, and you don’t lose your home, this could work right for you.

Who Mortgage Refinancing Doesn’t Work for

If you’re just looking save a few percent points off your mortgage, the cost of closing the mortgage will be greater than the amount of savings you would see. This is some serious stuff, you should be very careful when you do it. You’ll want to do it if you absolutely have to; if you only have a year to pay off your mortgage, and your interest rates aren’t too painful, this probably isn’t the way you should go.

Erin Thompson is a mortgage broker and financial blogger for Homebase Mortgages.  HBM is a Toronto mortgage broker that provides mortgage refinancing, mortgages for the self-employed, home equity loans and lines of credit, debt consolidation, private mortgage lending and second mortgages. You can visit their website at http://www.homebasemortgages.ca/