Published on 31 March 2016

When is the Perfect Time to Refinance Your Mortgage Loan?

One of the biggest purchases that you will make in your lifetime is a home. This means that you will likely have to finance the purchase of a home with a mortgage loan. One of the things that you have to understand about mortgage loans is that they come attached with interest rates that can sometimes increase over time.

Since the life of a mortgage loan is so long, the amount that you are paying in interest alone is substantial. Refinancing your mortgage loan can be a great way for you to get access to lower interest rates and to get access to cash that you might need to maintain your home.

Before you consider refinancing your mortgage loan, it is important for you to know when the ideal time is to do so. Also, we recommend speaking to your YFG lending specialist to help guide you through this process.

Here are some of the most important things to consider when you are deciding when to refinance a mortgage loan:

Has Your Credit Score Gone Up?

Your credit score does matter when you are trying to refinance your mortgage loan. This means that you often want to wait to refinance your home until your credit score has had enough time to improve. You will get access to the lowest interest rates if your credit score has gotten better since you first obtained your mortgage loan. Taking a look at your credit report will allow you to see just how much your credit score has improved and if you will actually be able to get access to a much lower interest rate when you refinance your mortgage loan.

Debts Have Been Paid

If you have paid off some other debts since you first got your mortgage, it might also be a good time to consider refinancing. You might have paid off a car loan or student debt since you first obtained your mortgage loan. This means that your debt to income ratio has improved over time. This will help you get a much lower interest rate on your mortgage when you refinance the loan. As long as you have paid off some debt, it won't hurt to look into refinancing and see if it is the right option for you.

Fixed Rate

You might also decide that you want access to a fixed rate mortgage loan instead of variable. If you are looking for more stability, you can choose to refinance for a fixed rate that stays the same.

Other Blogs

8 November 2016
What is an interest-only loan
Every loan has a declared rate of interest. The interest could be a fixed rate or floating. It could be a combination as well, fixed for a few years and then adjustable as per the prevailing lending rates in the market. All standard loans are re-paid over a period and every instalment has a bit […]
Read More
1 November 2016
What is bad debt and what is good debt?
Debt is unavoidable. All of us have debts. For some people, the debts are simple obligations like utility bills. For many, it would be a credit card bill. From mortgage to paying back the student loan, people have myriad types of debts. It is almost impossible to avoid debts. Even the billionaires of the world […]
Read More
25 October 2016
What does it mean to have a guarantor on your mortgage?
Buying a home is difficult. Buying a home when someone is very young is all-the-more challenging. Young professionals may be able to pay the instalments of the mortgage but saving enough to make the down payment is an uphill task. When one is in their twenties or even early thirties living in the city or […]
Read More