Pros And Cons Of Refinancing Your Mortgage

Is it a good idea to refinance your mortgage? Mortgage Specialist outlines the best options at your best rates. You may benefit from an interest rate reduction, prolong your amortization period, or use the equity in your home; refinancing is the best option for the right reasons.

Refinancing your home could make good sense.

There are a few compelling reasons to consider refinancing your mortgage.

Refinancing is when you'd like, or require, to negotiate the terms of your mortgage to get an alternative that is more suitable for your needs generally to get greater capital inside your property or to get better mortgage choices. It is possible to do this anytime during the term of your mortgage or even at the time of renewal (applicable charges and penalties could be useful). If you switch lenders, you will have to pay for the mortgage contract to start an entirely new one with a new lender.

It's not a guarantee that refinancing is the most effective choice. It doesn't matter if you wait until the renewal date or if you need to refinance or switch lenders at the end of the term you're currently in. There will probably be charges like setup fees or legal prepayment penalties. However, there are times when it makes financial sense.

Our The Mortgage Specialist brokers can examine your specific situation, swiftly determine your pros and cons and explain any advantages to help you determine whether refinancing is appropriate for you.

Pros And Cons Of Refinancing?

Pros: The Good reasons why you want to refinance your mortgage

The main reason is to get the mortgage for your needs. Your home is your mortgage. So, what do you require?

• Additional money to help with renovations or investing purposes, using a loan of as much as 80% of the value of your home's worth

• Get money back by using low rate and locking into guard against rate hikes in the future.

• Make room for budgeting by reducing your monthly payments by using an interest rate reduction or longer amortization

• Get your mortgage paid off faster with lower rates and the ability to pay a lower amortization while maintaining approximately the same amount of payment.

• Consolidate debts with higher interest into a mortgage with a lower interest rate in one payment

Cons: The additional fees and costs you might incur when refinancing

If the prices are burdensome, they can make it impossible to refinance. Our experts guide you through the various charges and expenses depending on the specific circumstances of your situation to provide a clear understanding of the details of your refinance.

Refinancing typically takes 2 to 3 weeks to complete the terms. Our helpful brokers will make the process easy and painless, and you'll be ready to sign an agreement with a new mortgage that is more suitable for your needs.

Here are some fees you may face:

• The mortgage registration fee, the amount differs by province.

• Legal costs (a lawyer will be required to supervise your mortgage)

• Appraisal cost (a lender may require that your home be appraised to guarantee that you get the best value for the new mortgage)

• Charges for mortgage discharges when you change to another lender

• Prepayment of mortgage penalties for fixed-rate mortgages will be the higher of 3 months interest or the interest rate differential (IRD) to pay for the interest you signed up for when you signed your mortgage.

What is the difference between renewing and refinancing?

• Renewal of your mortgage. When your natural renewal date is over, you can sign a new contract with the lender you currently have at the rates offered (or agreed upon) with the same clauses and terms. Also, we can assist you in finding the best mortgage option.

• Refinancing your mortgage. Refinancing is breaking the current conditions and terms to establish a new mortgage with unique requirements and terms depending on existing lenders or with a different one. Refinancing can happen anytime during your mortgage term or even during renewal, with additional fees or penalties. If you've just a few years remaining on your mortgage, you might permit a refinance in the middle of the term or a blend-and-extend according to what you'd like to alter.

Refinancing Requirements:

1- Acceptable Loan Purpose

It is necessary to have an acceptable refinance reason according to the lender's guidelines. The most appropriate reasons are improvement in assets, consolidation of debt by combining second and first mortgages, renovations and purchase of investments.

• Extended amortization is available for up to 30 years.

• Cash advances that are up at a maximum of two

• This program does not include mortgages that are set for default management purposes

2- Eligible Properties

• Owner-occupied -- Maximum four units, with a minimum one of them that is occupied as the primary residence and only for existing properties (not for construction)

• Secondary properties or homes for investment -up to two units and only properties currently in use.

3- Amortization Options

• Extended amortizations are available for that last up to thirty years (depending upon the lending institution and for non-insured conventional mortgages)

It's simple to begin your refinance process today. Our mortgage broker Burnaby will quickly respond to your inquiry.