How And When To Refinance Your Real Estate Mortgage


Various reasons can be attributed to why individuals renege on the payment of their real estate mortgage. All things being equal, no one will ordinarily want to ignore the commitment when housing or shelter is a concern but it often happens, hence the need to find an urgent solution.

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Real estate mortgage refinancing is the situation in which a real estate owner pays up an existing obligation and in turn, replaces it with a new loan. More often a low-interest mortgage.

Some of the identifiable reasons why homeowners refinance their mortgage include:

  • Offer off lesser interest charges: Real estate owners sometimes receive tempting offers from mortgage institutions which they find irresistible to reject, hence the need to use the offer to replace their current mortgage.
  • Another common reason why homeowners refinance their mortgage can be attributed to Opportunity to shorten the terms of their mortgage.
  • Sometimes homeowners unknowingly sign up to an adjustable rate mortgage terms and soon discover that a better-fixed rate mortgage exists somewhere else. These often necessitate opt in for a refinancing of their initial real estate mortgage.
  • Lastly the need to consolidate existing debt often make real estate owners refinance their mortgage.

The decision to refinance a real estate mortgage is a delicate decision to make and effort must be invested in taking the right decision. A savvy finance advisor will be of immense assistant when pondering on mortgage refinancing.

The attraction of lower interest mortgage must not be the only reason to want to refinance your real estate mortgage because this could be a slippery slope into longer debt servicing.

Due diligence must be carried out by an expert in the field before taking the refinancing rout, especially if your objective is to get out of debt. Homeowners must also consider the cost associated with the refinancing process as such cost can sometimes be very high.

Homeowners desirous of refinancing their existing real estate mortgage must look out for the following when considering the various options available for refinancing by lenders:

  • COST OF REFINANCING: There is a cost associated with the refinancing process; make sure this cost will not negate gains from your refinancing effort.
  • BE ON THE LOOK OUT FOR THE REAL RATE: Advertised rate are often not the total/real rate to be paid. Homeowners often discover the hidden charges associated with the new mortgage rate.
  • Find out if there is any prepayment fee associated with your mortgage and your lender.


Homeowners may desist from refinancing their real estate mortgage if:

  • You have invested a considerable amount of time in your current mortgage.
  • You are about to move.

Finally, Refinancing can be an awesome money related move on the off chance that it diminishes your home loan installment, lessen the term of your loan or helps you build equity rapidly. At the point when utilized precisely, it can likewise be a profitable device for managing your debt. Before you refinance, examine your financial status and ask yourself: How long do I intend to keep living in the house? What’s more, what amount of cash will I spare by refinancing?

Endeavor to always consult a financial planning advisor for indebt assessment of your debt status.


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