Refinancing is the gold standard when it comes to borrowing money at the lowest interest rate possible. This is because secured financing offers the most competitive interest rates, which allow borrowers to maximize on substantial savings. This can come in handy if borrowers have high credit card balances or other loans that reduce necessary monthly cash flow because of high interest payments. There are many more reasons a borrower may choose to refinance their existing mortgage but it always depends on the final cost analysis and whether the savings and benefits make sense.
Reasons to refinance your current mortgage
Whether you want to complete a home renovation, consolidate debt, take out an equity line of credit, access equity in your home, send a child to university or purchase an investment property, refinancing your existing mortgage can offer you a valuable solution.
Refinancing often makes sense especially if you would have otherwise obtained credit or a loan somewhere else at a higher interest rate.
Because unsecured loans are not secured against collateral like real estate, they are always higher interest than secured ones. Therefore, your home can be used as a tool you can capitalize on by paying substantially lower costs on the funds you need.
What are the costs to refinance?
In order to refinance your mortgage, you will have to break the term of your original mortgage. This may trigger a prepayment penalty. If your existing mortgage is a variable rate mortgage, the penalty should only be three months worth of interest. A fixed rate mortgage may cost either three months worth of interest or the IRD, which stands for Interest Rate Differential. We can help you figure out what the total costs will be to break your mortgage early and the overall savings refinancing your mortgage will afford you.
As mortgage brokers we work to ensure you will be in a better position today then you were with your original lender, yesterday.
Do I need a lawyer to refinance?
In order to refinance your mortgage, you will require a lawyer. A lawyer must discharge the existing mortgage and register the new mortgage in favour of your new mortgage lender. Legal fees vary from firm to firm so it's important to check around and compare prices. Usually, legal fees are between $750 to $1,500.
How much can I refinance my home for?
You can refinance your home to up to 80 percent of your home’s value, which will be confirmed by an appraisal.
Combine your current debt into one low monthly payment!
Ways you can refinance your mortgage.
- Refinance your existing mortgage by breaking it early, paying a prepayment penalty and negotiated a new mortgage payment, interest rate and new mortgage terms with a completely new lender.
- Complete a blend and extend with your original lender to blend the rate and increase the mortgage balance.