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As a lending professional, you know refinancing can offer many homeowners a pathway to better mortgage terms and financial freedom. But misconceptions about the refinancing process can keep borrowers from making informed decisions. Here’s a breakdown of common refinancing myths and the truths behind them to help set the facts straight:
Myth 1: Refinancing is only worth it for lower interest rates
Truth: While securing a lower interest rate is a common reason for refinancing, it's not the only benefit. Refinancing can also be used to change the term of the loan, switch from a variable rate to a fixed rate for more predictable payments, or access home equity for large expenses.
Myth 2: Refinancing is too expensive to be worthwhile
Truth: There are upfront costs involved in refinancing, such as application fees, appraisal fees, and legal fees. But the long-term savings can outweigh these initial expenses, especially if the new mortgage terms significantly lower monthly payments or interest paid. Helping your customers perform a break-even analysis can show them whether refinancing is the right next move for them.
Myth 3: You need a perfect credit score to refinance
Truth: While a higher credit score can secure better refinancing rates, homeowners with less-than-perfect scores can still refinance. Various refinancing options cater to different credit profiles. Mortgage lenders are in an excellent position to educate clients about these options and suggest ways to improve credit scores if necessary.
Myth 4: Refinancing takes too long to be effective
Truth: The refinancing process can vary in length, but it doesn’t necessarily take as long as some might think. With the right preparation and documentation, the process can be streamlined. You can expedite this process by preparing customers on what documents are needed and what steps to expect.
Myth 5: You can only refinance with your current lender
Truth: Homeowners are free to choose any lender when refinancing. This opens opportunities for better rates and terms elsewhere. Offering competitive rates and exceptional service can always attract customers looking to refinance, regardless of their current mortgage lender.
Myth 6: Refinancing is only for financially unstable homeowners
Truth: This myth can prevent financially stable homeowners from exploring how refinancing might improve their financial situation. Refinancing is a strategic financial move, including for financially stable homeowners looking to optimize their financial plans. Helping your customers understand it this way can go a long way to dispel any stigma associated with refinancing.
Why choose FCT for your refinancing needs?
At FCT, we specialize in helping individuals navigate the refinancing process with ease and expertise. Our deep understanding of the refinancing market in Canada lets us provide tailored solutions that meet the needs of each transaction. By choosing us, you leverage our expertise to offer the best refinancing options available. Enjoy predictable, precise and protected refinance and transfer processing from FCT.
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