We all look forward to the day we will own a home, a perfect house on a great plot of land. When this day comes, you are likely to be overjoyed. Mortgages are among the costliest debts any family can have. Therefore, it is important to understand everything about them so that you can find your way around. If you are considering refinancing your mortgage, do not let these misconceptions to get in your way.
Myth #1- Refinancing is not worth it
Making the decision on whether refinancing is worthwhile or not will come down to your specific circumstances. Many benefits are associated to refinancing, including paying lower interest. If you are stuck and need some cash, refinancing could also be the way. For divorcing couples, the partner keeping the house might have no other option but to refinance so that they get money for paying their ex-spouse for their share of the home.
Myth #2- You will need at least 20 percent deposit
It is apparent that applying for a mortgage with a big deposit increases your odds of being accepted. The bigger the deposit, the less the lender has to give you and the evidence that you will not have to struggle much to settle the debt. However, this does not mean that you will not get a home with less than a 20 percent deposit amount. Some lenders are considerate to the level that they allow five percent.
Myth #3- I already have the best deal so there is no need to refinance
The fact that you got a nice discount when applying for the mortgage the first time does not imply that it was the best deal. Remember that no bank will call and offer to reduce your interest. However, over time the rates might go down and if you are lucky enough, you may land the deal of a lifetime.