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Making Smart Choices

by admin on March 20, 2015

Before deciding to refinance, it would be wise for homeowners to speak to a mortgage specialist to do the calculations to see if the interest rate savings is greater than the prepayment penalties. If so, refinancing can be a smart financial decision that can help reduce mortgage payments, build equity, shorten the term and reduce debt.

However, if the prepayment penalties are greater, now may not be the best time to refinance. Especially when taking into account that 20% of the equity must be accumulated before as only 80% of the home value can be refinanced. Instead, the best course of action would be to wait until your mortgage term is up and look for a better rate when renewing.

The bottom line is that refinancing can be a good choice if it is used to help you save money or get out of debt. So, as long as the numbers make sense and you have enough savings, a home refinance can be worthwhile as the rates are currently at an all time low.

Contact a mortgage specialist at Maple Leaf Mortgages for a free consultation or apply online.

Written by Christy Lee

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