In a loan restructuring or conversion – you pay off your current mortgage and take out a new loan under different terms. This can be advantageous if interest rates have changed significantly, either downward or upward.
If interest rates have fallen, restructuring to a lower rate can result in lower monthly payments; however, your remaining debt may increase slightly due to costs and loss in value.
If interest rates have risen, you can reduce your remaining debt by refinancing to a higher interest rate. This will give you a higher monthly payment, but at the same time, it allows you to take advantage of a potential drop in interest rates later.
If you are already in the process of refinancing your loan, it may be a good idea to consider a supplementary loan for home improvements or other projects.
