Refinancing a mortgage replaces your current mortgage with a new one. This includes a new term and interest rate. You can also renegotiate a longer amortization and access additional funds. This allows you as a homeowner to access as much as 80% of the appraised value of your home.
Mortgage Design Group Inc. is here to guide you through the entire process.
WHY WOULD YOU CONSIDER REFINANCING YOUR MORTGAGE?
Reducing your interest rate to lower monthly payments.
Access your home’s equity to help finance large projects or purchases.
Increase the amortization to reduce payments.
Consolidate high-interest credit cards or other consumer debt.
One of our clients recently approached us to refinance her mortgage so she could lower her monthly debt load. By accessing the equity available in her home, she was able to pay out a car loan, eliminate all credit cards and lines of credit, and still had some funds remaining to put towards a roof.
By refinancing her home up to the maximum 80% of the appraised value and increasing the amortization to 30 years, she was able to make her monthly payments much more manageable. Here’s how the new mortgage funds were dispersed:
Appraised Value of the Home – $280,000
New Mortgage Amount – $224,000
Payout Current Mortgage and Penalties – $132,000
Lawyer and Legal Fees – $2,000
Car Loan – $30,000
Credit Cards and Line of Credit – $30,000
Total Paid Out – $194,000
The remaining amount of the mortgage, $30,000, was transferred to the client, who was able to replace the roof and invest additional money into a retirement plan. Most important to our client was that she was able to reduce her monthly payments from $1,450 to $950 by eliminating her high-interest credit card and large monthly car payment.
That’s one happy client!