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The Ultimate Guide to Refinancing: Securing Low Rates for Your Luxury Property

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Published
06/24/2023

When it comes to buying a home, realtors love to say, “Date the rate and marry the house”. So long as you can afford the monthly repayments, this can be good advice. In fact, every homeowner should consider refinancing and changing up their rates whenever a big change happens. This could be a big boost to their credit score, or perhaps rates everywhere are dropping.

Just as changing utility providers regularly can help you gain access to great deals, so too can changing up your mortgage. You can put a lot of money into your property to transform a big fixer-upper project into a luxury property. Refinancing it afterward or mid-way through your renovation project can easily help free up more of your own money, so you can live big for less.

 

What Is Refinancing?

In short, refinancing is simply replacing your old mortgage with a new agreement. People refinance their homes to get better terms, to gain access to lower interest rates, or even to unleash a certain amount of equity of their home that they can then use to, say, put towards a renovation project.

 

How to Refinance Your Home

Before you get too excited, know that there is a time and a place to refinance and when it simply won’t make sense. A good way to determine what kind of refinancing deal you can get is to use an online refinancing calculator. This calculator can help you work out just what kind of deal you can expect based on multiple factors. If the price isn’t actually that different, then there isn’t much reason to go through the hassle of refinancing.

Refinancing can also help you release equity, however, so ultimately, it boils down to your goals and whether you find refinancing a worthwhile endeavor. Once you decide it’s for you, you’ll want to take these steps:

 

·       Shop Around

When it comes to refinancing, you want to shop around. Shopping around between lenders is a great way to gain a full and comprehensive understanding of what the market can offer and which one is the best deal for your situation. Places you can turn to include banks, credit unions, and mortgage brokers. When refinancing, it’s important to remember you’ll only “lend” what you haven’t paid off, not your home’s total when you bought it.

 

·       Time for Paperwork

Once you have an offer that suits you, it’s time for the paperwork. You can streamline this process by gathering all the necessary documents ahead of time. Examples of what you’ll need to include are income verification, tax returns, a new estimate on your property, and, of course, bank statements.

 

·       How to Leverage Your Equity

One of the big benefits of owning a luxury home, especially if it was a fixer-upper and you’ve put a lot of work into it, is that you can usually release equity later on. You can use your home’s equity as collateral to help you secure far better interest rates, even if your own financial situation hasn’t changed much.

 

·       Lock in the Deal

Finally, all that’s left is a final round of negotiations. You can negotiate a lot, including appraisal fees, attorney fees, and so on. Once you’re happy, all that’s left is to lock in the rate so that you can enjoy the improved financing for years to come.

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