Benefits of Refinancing Your Mortgage
August 5, 2010 § Leave a comment
Your mortgage may have a 25 year life, but not many homeowners stay with the same mortgage for that long. In fact, the average Canadian refinances his or her mortgage every four years. Paying off your present mortgage and taking out a new one can mean big savings over several years.
Here are some reasons to consider refinancing your mortgage with The Mortgage Centre:
- To obtain a lower fixed rate. If you took out a fixed-rate mortgage several years ago and interest rates have since dropped, refinancing may lower your payments considerably
- To switch to a fixed rate or an adjustable rate mortgage. Variable Rate Mortgages offer lower interest rates initially, but some homeowners find the fluctuations stressful. If rates are on the way up, you might consider locking in at a fixed rate and consistent monthly payment. On the other hand, if you want to reduce your monthly payments and are comfortable with the interest rate changes of variable, it could save you money to refinance and go the variable route.
- To build your home equity faster. If a recent change in your financial situation has made it possible for you increase your monthly payments, you might want to refinance your mortgage with a shorter amortization. The higher payments will enable you to pay off your home more quickly and to save substantially on long-term interest charges.
- To turn home equity into cash and pay out high interest debts. You may want to take out a new mortgage with a larger principal, in order to turn some of your home equity into cash for a major expense. This is called cash-out refinancing. The advantage of taking out a loan secured by your home is that you can get a lower rate of interest than you can with an unsecured loan or credit card. If you have a high credit card debt load, this can save you thousands of dollars in interest per month.
If it sounds like you could benefit from Refinancing your home, give us a call today and we’ll tell you how much you can save! Call John Panagakos at 416-406-1659