5 Tricks to Get The Most Out Of Your Refinance Loan
As we get older, there are more things to cover, utilities, housing, medication, insurance, education, business costs, daily expenses—your list will go on and on. You’ve got to have a good financial management strategy to make sure your refinance loan gives you the best financial coverage and lasts until your urgent needs are met. But, it’s your lucky day. We’ve got the tips on how you can make the most out of your refinance loan.
- Consider using NSW Mortgage Corp. It has many loan options designed to meet your specific financial needs. You can get better rates than you can get from mainstream banks that are most likely to turn down applications of people with less stellar credit ratings. You don’t have to pay any brokerage fee, like those who hire mortgage broker. The mortgage officers of NSW Mortgage Corp will do the work for you based on your financial needs.
- Reduce the mortgage term – Instead of extending the term of your loan to get lower monthly payments, it is advisable to pay larger installments each month so you can pay your refinance loan quicker. You can save more with shorter term programs because they often have lower interest rates.
It is also worth mentioning that you will have to pay lesser interest overall if you will shorten the term of your mortgage. That’s why it is advisable to negotiate with your existing mortgage lender to reduce your loan term, or you could refinance to get a new deal. But you have to prepare for higher monthly repayments—the obvious downside of shorter term loan. So, make sure that you only set it at a payment range that you can afford to avoid saddling yourself with high mortgage payments.
But, if you think you are not capable of making a commitment to a higher monthly payment, ask the lender about overpaying or offsetting options to gain flexibility in your repayment. However, shorter term is a surefire way to pay your mortgage early.
- Stay in your home longer. Don’t sell your home right away. You’ll be surprised at how much your home value appreciates simply by holding onto your property for a little more time.
You can get lower interest rates for refinance loan if you stay in your home for another five years or more. As you pay down your home, it will appreciate in value. You can make extra mortgage payment each month to build equity—even one extra principal payment each year can potentially pay off your home loan five to ten ahead of time. Use tax refunds, bonus and other extra money to give your lender an extra principal payment every year.
While you’re in it, you can make minor kitchen improvements. Fix the electricity and plumbing and other home improvements to add more value to your property. You don’t have to drain your bank account to do this. Refinishing your cabinets and installing new appliances will not break your bank.
- Avoid “no cost” refinancing, unless its terms are on your favor. If you don’t pay for the cost outright, the lender is more likely to charge you with a higher interest rate over the life of your refinance loan. Many lenders are giving you points to offset the cost of closing. On the other hand, if you intend to keep the loan for up to three years only, simply paying off the high interest could be a lot cheaper than paying off the closing cost. For this reason, it is very important to tell NSW Mortgage Corp mortgage officers about your purpose in getting a refinance so that they can help you work out a repayment plan that will be advantageous for you.
- Consolidate your debts – It is advisable to obtain mortgage refinancing to consolidate your debts into one payment. This is a viable option for people with equity in their homes. But, make sure that you are doing this to take advantage of rates’ dropping—meaning, you will be able to save on interest rates if you do so.
A refinance loan normally carries lower interest rates than unsecured loans so you can save money on interest payment. The lower the interest rates each month, the lower and more affordable is the monthly payment. You can also inquire at your local revenue office is such payments will qualify for tax deductions. Interest payments on loans secured by your home are considered as tax deductible.
Debt consolidation allows you to make a single monthly payment with lower interest rates thereby substantially easing up your financial burden. Refinance loans are also generally easier to obtain because of the lesser risk it carries for the lender, compared to unsecured debt consolidation loans.
Want to know how refinance loan can work for you? Contact NSW Mortgage Corp today!