Refinance Mortgage
A mortgage refinance is a new mortgage that is taken out to replace a current mortgage. It is a term loan that a homeowner can apply for, in the same amount as an existing mortgage, or a greater amount. A homeowner may also apply to combine a first and second mortgage into a single first mortgage at a lower overall interest rate, or as a second mortgage that is in addition to a current first mortgage. As with a new purchase mortgage, a home refinance is secured against your home. A qualified mortgage broker can help increase your chances of getting your mortgage refinance application approved at the lowest rate available to you.
Mortgage brokers have access to a wide variety of lenders and can help you get great refinancing rates at a bank, or through alternative lenders if your credit is bad or less than ideal, you have too many revolving debts on cards, your income is low, or you are self-employed and have a non-traditional way of reporting your income.
When Should You Refinance Your Mortgage?
Here are some of the reasons why a homeowner may decide to refinance their existing mortgage:
- Mortgage refinance for consolidating debt using the available equity from your home or commercial property - If you have high interest debts, such as a credit card debt or other loans, that are piling up, then using the equity that is available in your property for refinancing your mortgage and taking the extra money to put it towards paying off your existing debts such as back taxes.
- Mortgage refinancing to renovate a home - Home renovations can be expensive and home improvement store credit cards usually have high interest rates associated with them. By using the equity that you have available in a commercial property or from your home equity, you can pay for your home renovations at a much lower rate than if you were to put all your purchases on a store or personal credit card.
- Mortgage refinance to improve cashflow management- During retirement, there can be a time when cashflow is not enough to sustain a comfortable lifestyle. If you are a homeowner, then one of the quick and easy solutions that may be available to you can be refinancing your mortgage
- Mortgage refinance to invest - There are more and more Canadians who are turning to refinancing their mortgages and using the extra funds as a down payment or deposit on buying additional homes, commercial properties, and investment and income properties.
- Mortgage refinance to lower mortgage rates - These days, some homeowners are using these funds and investing the money into investment tools such as lending money for private mortgage investing, that yields much greater returns. This is called financial leveraging
- A senior’s reverse mortgage refinance for retirement - With post-secondary education becoming more and more expensive, many homeowners are turning to mortgage refinancing to pay for their child’s college or university education. Refinancing your home can also be a great solution to paying back higher rate student and education loans.
Pros And Cons of Refinancing Your Mortgage
While refinancing your mortgage can have its rewards and advantages, there are some things you should know before proceeding to apply for a home or commercial refinance.
Advantages and rewards to refinancing your mortgage:
Debt Consolidation
Repair your credit
Take advantage of lower mortgage rates
Access cash through the equity in your home or commercial property
Some potential drawbacks to refinancing your property:
Refinancing fees
Penalties for breaking your mortgage early
Higher mortgage payments
Contact Rajan Saggi, Senior Mortgage Consultant @ 604-767-5050 today to schedule anappointment!