When Can You Refinance A Mortgage?

Purchasing a new house is an exciting event with a lot to be done, regardless of whether you’ve done it all before or this is your first time. What would happen if mortgage interest rates dropped below your present rate while you were still settling into the neighborhood? You might be able to reduce your monthly mortgage payments and save money on interest by refinancing your mortgage loan.

There are plenty of excellent reasons to get a new loan, but it’s possible to refinance too soon. Determine how much closing costs and fees will affect your payment and whether now is the ideal time to refinance. 

Usually, you can’t refinance unless you have paid off your present debt for six months in a row. 

When is the right time for mortgage refinance?

Your financial state and the purpose of your refinancing mortgage in Surrey will determine the ideal time to do so. Every year, some borrowers take a brief look at their mortgage to see if they would benefit from a refinance. Some examine when interest rates decrease. 

When thinking about refinancing a residential mortgage, it’s a good idea to figure out how much your payment will alter and when you’ll break even. The time it will take for the money you save with lower payments to balance the cost of refinancing is known as the break-even point. It makes no sense to refinance if you want to sell your house before you reach break-even.

Pros of refinancing your mortgage soon

  • Save on interest payments

If interest rates have decreased since the closing of your loan, you can benefit from a refinance. You might be able to reduce your monthly payments and save money on interest if there is a big decline in the rate.

  • Benefit from improved credit

Since you’ve been consistently making your mortgage payments on time, has your credit score increased recently? It might be a smart idea to refinance as soon as possible to take advantage of your better credit if you’re now qualified for a more favorable interest rate.

  • Leads to a shorter loan term

You might be eligible for a shorter-term loan if your income has increased since the closing of your previous mortgage. On the other hand, you can decide to refinance to a longer-term loan in order to reduce your monthly payments if your income has dropped.

So, these were some benefits and a brief guide on what mortgage refinancing is and the right time to do it. If you are looking for a reliable mortgage broker in Surrey who can assist you with mortgage refinance, Satbir Bhullar is the name to trust. From new approvals to transfers and refinancing to renewals, we specialize in a wide range of mortgage products. Contact us today to discuss your Surrey mortgage refinance needs.