Refinance Your Mortgage like a Pro!

Refinancing your mortgage is an excellent opportunity to get your household finances in order.  Here are a few ideas to help you do it like a pro.

Determine Your Goals – This may seem somewhat simple, but consider that your mortgage is often the single biggest monthly expense and debt for your household.  How can you set up your mortgage so that it is working at its very best for your financial situation?  Consider these five goals to make your mortgage work for you.

Pay off my mortgage quickly – Is your goal to pay down the debt so future you can live mortgage free? By switching to Accelerated bi-weekly payments, you can knock years off of your mortgage. If you switch to Accelerated bi-weekly payments, and increase your mortgage payment by 5% every year, you can pay off your twenty-five year mortgage in just over fifteen years!

Maximize Cash flow – Has your life changed in the last five years? Does aggressively paying down the mortgage not sound as great as it once did, now that you have additional expenses and other dreams? Consider increasing your mortgage amortization and lowering your payments to put more money in your pocket month-to-month. 

Take out Equity – If you are planning to make an investment or property renovations, you can use the equity that you have accumulated in your home (through appreciation or paying down your mortgage) and put it in your pocket. Lenders will let you borrow up to $200K or up to 75% of the value of your home and add it onto your mortgage, allowing you pay back the equity over a longer period of time.

Set up a Line of Credit – Are you planning a renovation or need an infusion of cash, but would like to pay back your loan at your own pace? Consider a Home Equity Line of Credit, which is a line of credit that is secured to the value of your home. You will get access to equity in your home at a lower interest rate than your bank’s unsecured Line of Credit or credit cards.  It can be a flexible financing option.

Consolidate debt – Do you have a credit card that is running close to the limit that you don’t seem to able to pay down? What about your unsecured Line of Credit? Put all these debts together in your mortgage and pay down your debt at a lower rate over a longer period of time.