24 Apr Types of Mortgage Refinancing- Which One Is Best For You?

Planning to refinance and looking for the possible refinancing options available? Refinancing is a financial strategy related to mortgages and help eligible mortgage borrowers to switch from a higher interest rate to a lower one. Whether you want to save money, lower your monthly payments or access funds for any purposes, mortgage refinancing in Abbotsford is the best choice to opt for. 

There are three major types of refinancing available and you can choose one that best meets your needs. In this blog post, we’ll take you through the best refinancing options available to help select an ideal one.

• Rate & Term Refinance

The most common refinancing type available is a Rate and Term Refinance. This refers to the process of switching out an old mortgage for a new one with a new loan term and/or a reduced interest rate. Usually, the purpose of this kind of refinance is to lower monthly mortgage payments or promote debt payoff. 

Since the rate and term refinance can have potential closing costs and fees, the savings it is going to generate should be carefully weighed against the expenses.

• Cash-Out Refinance

When you choose a cash-out refinance, you borrow more money than you now owe on your mortgage and get the difference paid in cash. This is frequently done in order to tap home equity for a variety of purposes, including debt consolidation, property upgrades, and other financial needs. In general, homeowners can only borrow between 80 and 85% of the total value of their house. 

Although the benefits might seem exciting, cash-out refinancing usually results in higher monthly mortgage payments and a larger loan amount.

• Divorce Refinance

It’s usual practice to refinance a house before, during, or even after a divorce, usually to separate a couple’s housing and financial matters. One spouse can typically get off the mortgage through divorce refinancing, allowing the other to keep the house or purchase the other’s part. 

When completing a divorce refinance, concerns include lowering monthly payments, obtaining funding for equity buyouts, and guaranteeing adherence to the divorce settlement. Each spouse’s unique financial situation will determine whether they can refinance and the refinancing terms. 

Conclusion

Your existing financial status, your debt load, and your mortgage needs all in collaboration determine the kind of refinancing you can apply for. To make sure you end up making a profitable choice, always consider the advantages, disadvantages, and limitations of the refinancing type you are planning to opt for. 

If you are looking for a reliable mortgage broker in Abbotsford to help you out with mortgage refinancing, choose no other than Satbir Bhullar. With years of experience in the industry, you can rely on Satbir for easy and quick residential mortgage, refinancing, and renewal services. For more details, feel free to contact us anytime.