What is a mortgage refinance?
Refinancing a mortgage simply means paying off an existing mortgage and replacing it with a new one. Homeowners choose this strategy for a range of reasons.
The most common benefits of refinancing:
1. You can lower your total monthly debt payments to improve cash flow or free up money for a rainy day savings fund
2. You can consolidate high-cost debt, such as credit cards, car loans or other personal loans
3. You are able to renovate your residence to make it more comfortable or to fix major problems
4. By setting up a home equity line of credit or “HELOC”, you can finance purchases of investments or properties, large-ticket items, or future retirement needs, at a very attractive rate
5. In the case of a separation or divorce, you can access funds to finance a spousal buyout
Details to keep in mind
You’ll need to pull some documents together, and there may be costs that apply, when you’re switching your mortgage to another lender. Don’t let this discourage you from finding out more. *It doesn’t cost you anything to check out your options or get a second opinion*, and it may save you a ton of money and/or hassle in the long run. When you switch your mortgage to a new lender, you will go through an approval process similar to when you took out the original mortgage. You can either assign your existing mortgage or you can apply for a new one should you want to borrow a larger amount to consolidate your high interest debt or complete some renovations.
Your lender may charge a discharge fee, and you may need to pay legal and appraisal fees if you are getting a completely new mortgage instead of switching your existing one. We can help you to understand your prepayment features of your current mortgage and whether this can be factored in to decrease any penalty incurred. At that point, you should assess if the money you will save by switching to a better interest rate offsets those costs. The cost for your mortgage life insurance may also change. You won’t have to pay for my services (OAC) because typically the lender provides a finder’s fee after the mortgage with you is completed. It’s a win-win!
Get in touch
If you think you might want to look into refinancing your mortgage, whatever the reason, even if you are just looking to benefit from a lower mortgage rate, we can help you review your options and decide if this option can help you in your own individual situation. If you would like to discuss this further, please don’t hesitate to contact me!
