What is Mortgage Refinancing & Why Do You Need It?
If you currently own one or more properties, you’re already the envy of many. Especially if the properties you own have appreciated in value over the last few years. That’s an asset but do you want to get more out of it?
A gain in your asset portfolio is always good, however some may feel that their money is being tied down by these properties and chose to miss out on opportunities to make these assets work for us. There are many things that might have changed since you first obtained your mortgage. For example, now you might want a shorter loan tenure or find that a more affordable loan is available in the market. Naturally you would want to consider making those changes in your existing mortgage. Refinancing your mortgage will help you to do so.
Refinancing mortgage is a process that allows you to swap your present mortgage with new and better features such as lower interest rates and monthly payments. With the new loan, you can pay off the old loan while start paying a lower amount to the new financier. With Citibank’s mortgage refinancing, you may free up your cash and capitalize on these opportunities.
Benefits of Mortgage Refinancing
Savings on your Interest Cost- This is the biggest benefit of a refinancing loan. If you are paying a high rate of interest on your existing mortgage, you can now save money by opting for a refinance. Through the refinance loan with a lower rate of interest, you can now save on your interest cost and consequently on your monthly instalment.
Change in Loan Tenure- A change in loan tenure is a significant factor for your finances as it directly affects your monthly instalments. With a refinance Mortgage, you can change the tenure of the loan as per your needs. If there is an increase in your income and financial capability, you can opt for shorter loan tenure and pay off the mortgage faster through a higher instalment amount. Similarly, in case your income decreases or you have other financial obligations to fulfil, you can opt for a lesser monthly instalment by opting for a mortgage refinancing with a longer loan tenure.
Cash Flow Adjustments- A mortgage refinancing can lower your monthly payouts/ commitment. That consequently helps you manage your cash flows and provide you with more money for your daily expenses. With the cash flow, you can also pay off other bills which can improve your credit score.
Why Should you Refinance?
Pay for your child’s education– You can unlock a better future for your child by educating him/her in the best educational institutions. Refinancing mortgage can help you finance their education easily and thus give them a better future.
Consolidate your debts– With mortgage refinancing, you can consolidate all your debts like credit card bills, personal loans, car loans, education loan, etc. that would help you keep track of the payments.
Tackle an emergency situation- The increased cash flow through a loan refinance can help you tackle any emergency situation in a better manner.
As we go through different stages of our life, there will always be key events that may take a large portion of our financial attention. These stages such as getting married, starting a family and supporting our children’s education are rewarding but can be stressful. Having the opportunity to leverage on an existing property to obtain the needed cash for these occasions always a good option that can be considered.