Options For Refinancing Your Mortgage in 2023
There’s a lot of uncertainty lately with the new interest rates being a lot higher than their current rates, and the implementation of the new stress tests. People might be wondering if they can even afford the house that they have when they go to refinance their mortgage this year.
We sat down with mortgage broker Christine Beuman from Premium Mortgage, and she shared with us her best advice and several different options for refinancing your mortgage in 2023.
Straight Refinancing
So the first thing that we look at is just a straight refinance. Ask yourself is it more important for you to have a lower interest rate, or a lower payment? Sometimes they can be one and the same, and sometimes they’re not. So if we’re gonna do a straight refinance, you can go up to 80% of the current property value, stretch the amortization up to 30 years at a slightly higher rate.That also allows you to consolidate if there’s room, which is something we’re seeing a lot more of as well, and that covers any legal fees, any additional costs because you can lump it all into that new mortgage.
Secured Lines of Credit
When refinancing your mortgage, it’s important to consider what your future needs might be in the coming years. Adding a secure line of credit may give you a little bit of a buffer in your mortgage for the future. Now is the time to think about adding a secured line of credit, before you renew. If you’re going to make any changes to your mortgage, you’re going to have legal fees and appraisal regardless, it’s better to get those costs all done at once.
Staying With Your Current Lender
Always start by going to your current lender and opening the conversation to try to get their best option, upfront. The best thing about staying with your current lender, if you’ve made all of your mortgage payments on time, is there is no re-qualifying necessary.
Switching Lenders
There is a complexity to how the big banks can offer rates, and some just aren’t able to offer a lower rate. If changing or lowering your payments is important, you can look at transfer options, or cash back options for extra funds for debt restructuring. There are some lenders out there who are offering lower rates and no cost transfers.
Switching Payment Frequency
If you don’t want to extend your amortization for a longer period of time, depending on your situation and your mortgage, you may be able to adjust your payment frequency to fit better with your lifestyle. For example, if you’re currently paying on a monthly basis, you may consider going to bi weekly or rapid bi weekly, so that you have smaller payments that line up with your paycheque every two weeks, and it might feel a little easier to manage than a larger monthly payment. Another benefit to this is that your overall interest amount is reduced because of an increase in how fast you’re paying off the mortgage by going to a more frequent payment schedule.
When To Reach Out About Refinancing
If you’re looking at your refinancing options, it’s never too early to start the conversation with your lender or mortgage specialist. Take your time and look at all of the options available. Every bank or lender has different requirements for refinancing and renewal. Often, your mortgage broker can monitor the rates and lock you in at a rate if they know the rates are going up and you’re going to be refinancing soon. In general, four months is a good window of time that most lenders will hold rates for.
Refinancing Plus Improvements
There are programs available that allow you to refinance plus add room for improvements to your property. If you’re up for renewal, and you’re thinking that it might be a great time to finish a renovation that might add a little bit more value to your home, using a program like this will allow you to access the equity from your home. This is a great option if you want to add a suite to your home to increase it’s value, or rent it out as a mortgage payment helper and increase your monthly cash flow.
Summary
Don’t forget that professional advice can go a long way during this process. Whether it’s an experienced realtor who knows a local market inside or out or a mortgage broker who can guide you down the road of refinancing. Talking with someone who has expertise in this field can save you time and money down the road by avoiding costly mistakes or overlooking important details along the way.
Thanks for reading this blog post, we hope this makes your decisions easier when looking at all of the options for refinancing your mortgage in 2023.
If you’re looking to buy or sell real estate in Prince George, give us a call at 778-234-0845 or visit our website.
About One Oak Real Estate Group
One Oak Group is a boutique real estate agent group located in Prince George, BC, offering quality service, support, and advice for our clients during the buying or selling of their homes. We believe that every customer deserves to be treated like they’re our number one customer, and we aim to go above and beyond what’s expected of the average real estate group, to make your experience one you’ll never forget. Work with us today.
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