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Many people are taking advantage of the current low mortgage rates and are able to save quite a bit of money. However, for some, refinancing can cause complications as it might not be the right choice for the individuals’ specific situation. ⠀
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Here are 5 mistakes to avoid to ensure refinancing is right for you:⠀
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1. Don’t forget to start with the most important question: Why? ⠀
Understanding the reason why you are refinancing is crucial. It’s important to keep personal financial goals in mind when making these decisions and have a plan. Whether it’s reducing your monthly payment with a lower rate, or shortening the term of your mortgage, always ask yourself what is the reason for refinancing? ⠀
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2. Don’t just guess⠀
Never make assumptions on your home valuation or credit score. Always do your research and work with an accredited real estate agent to help you along the way and find out exactly what your home value is. Home valuation can greatly vary based on your location and local market conditions. ⠀
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3. Don’t be “teased” by low mortgage rates⠀
You might hear about “teaser rates” through but keep in mind that the lowest rates might not actually be available to you as everyone’s situation is different. Factors such as credit scores can determine what rate you qualify for and can sometimes come with other strings attached. ⠀
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4. Don’t wait on rates⠀
At certain points, rates can rise faster than they fall and you should never wait on rates to decrease. Although you should take advantage of good rates like those we are seeing now while you can, it’s not always about the rate. You might save on your monthly payment with a lower interest rate, but the interest paid over a longer-term could cost you. ⠀
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5. Don’t overlook your options⠀
It’s advisable that you speak to a trusted mortgage advisor. With access to a wide variety of mortgage solutions and tools, Here at Planulife we can work with you to determine your specific goals and find a mortgage that suits you.
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