3 Mortgage Refinancing Myths Busted

Here’s a partial truth: mortgage refinancing can save you money. Many real estate and financial experts recommend refinancing to improve your financial situation. And they’re right — it can lower your interest rate, reduce your monthly payments, or help you pay off your private home mortgage loan faster.

But here’s the truth: the potential savings come with many caveats that many homeowners don’t consider. So, if you’re considering refinancing your mortgage loan for your Montreal property, know the facts first.

Here are the three most common mortgage refinancing myths and the truth behind them.

Myth #1: You Only Need to Keep an Eye on Interest Rates

The Bank of Canada has issued a 75-point rate hike as part of the rate-hiking cycle. Montreal is, of course, not immune to this increase. This means that it’s now more important to monitor your variable-rate mortgage and ensure you have a solid plan in place in case rates continue to increase.

But that’s not the only factor you should keep tabs on. You also need to factor in how long you plan on staying in your home and the fees associated with refinancing. If you plan to move out soon, it may not make sense to refinance a home loan because you won’t have enough time to recoup the costs of the new loan.

Myth #2: Your Credit Score Doesn’t Matter

Securing a bad credit mortgage is difficult. But to refinance mortgage bad credit is an even more Herculean task. A low credit score will result in a higher interest rate and could mean you won’t qualify for refinancing at all.

Lenders use it to decide the interest rate to offer you and whether or not to approve your loan. So, if you have worked towards boosting your score since you first got your mortgage, you may get a better deal by refinancing. But if your score has gone down, you may end up with a higher interest rate — or you may not be able to refinance.

Myth #3: Refinancing Is Not Worth the Hassle

The process of refinancing a mortgage can be daunting. You’ll need to complete a lot of required paperwork, and fees are often involved. It can be tempting to stay put and keep making your current monthly payments.

But if you’re considering refinancing, it’s essential to do the math and figure out if the potential savings are worth the hassle. In many cases, they are. But it’s important to ensure you’re getting a good deal before moving forward. If there’s a substantial difference in the interest rate, the fees and paperwork will be worth it.

Get Expert Advice About Mortgage Refinancing

Mortgage refinancing can be a good way to save money, but it may not be the right move for everyone. If you’re considering refinancing your mortgage, talk to a real estate and mortgage representative from North East Real Estate & Mortgage Agency. We can help you decide if refinancing makes sense for your situation. We can also offer expert advice and guidance throughout the process. Take the first step today and contact us.