How Mortgage Refinance Rates affect your finances
Mortgage Refinance Rates can have a big impact on your bottom line. Here’s why – and what you can do about it.
Keeping an eye on the Mortgage Refinance Rate
One of the first things you need to do if you are worried about your mortgage refinance rate is to find out exactly what it is. Checking your mortgage refinance rate is as simple as logging onto a reputable website like Bankrate.com. If you are thinking about a mortgage refinance, simply plug in your interest rate on the calculator found there and figure out what your new payment will be if the mortgage finance rate ticked up.
Four (4) steps to combating a higher mortgage payment if the Mortgage Refinance Rate rises
- Knowledge is power! The reason you want to keep an eye on the mortgage refinance rate is that knowledge is power. Knowing the new payment you may be facing if the mortgage refinance rate goes up is the first step in combating it.
Once you know what you´re facing, then it´s time to examine a game plan for dealing with the worst possible scenario. For example, will you refinance your existing mortgage, put the property up for sale, tighten your budget, etc.
Whatever your decision, knowing what the existing mortgage refinance rate is crucial to making the right decision.
- Refinance to a Closed Mortgage! If you have an Open Mortgage, then you don’t have to worry about the mortgage refinance rate. So, if possible, refinance your existing mortgage.
This way, your payments remain the same for the life of the loan. The interest rate never changes and you can stop worrying about what the mortgage refinance rate is once and for all.
However, if refinancing your existing mortgage is not an option, then take the next logical step which is…
- Tighten Your Budget! When the mortgage refinance rate goes up and you can’t refinance to an open mortgage, this is the next best option.
Put all options on the table – from the cellphone to the lawn maintenance guy. All expenses must be examined to see where you can cut and save. If the mortgage refinance rate rises to the point where even stringent budget cutting doesn’t help, then perhaps it´s best to examine the following final step…
- Sell the Property! This is perhaps the most painful option for most homeowners to consider, but sometimes an increase in the mortgage refinance rate leaves no other option. If you’re at this point, you want to – at a minimum – do the following:
- Sell for enough to pay off the existing mortgage. Sometimes this is not possible. But try to get as close as possible so you don’t have to write a cheque at closing.
- Sell early. Put your home on the market early enough so that you have enough time to sell before your finances are beyond repair.
- Sell reasonably! As in, set a fair price for the property.