Table of Contents
- Understanding Mortgage Refinancing
- When to Refinance Your Mortgage?
- How Can Amansad Financial Help Refinance Your Mortgage?
Mortgage refinancing is when a homeowner obtains a new loan to pay off their existing mortgage(s), often to lower their interest rate. Generally, the refinancing loan has terms distinct from the initial mortgage and may come from a second lender.
When making significant financial choices, it’s important to consider why you’re taking out a new loan. There are several reasons why a homeowner may benefit from refinancing their mortgage. The following are some of the most often used refinancing reasons in Canada.
Refinancing to access home equity
By refinancing their mortgage, Canadian homeowners may borrow up to 80% of the value of their property, less any outstanding balances from prior mortgages. Borrowers are then free to use the funds as they see fit. Most are typically used for investments, renovations, education, or debt repayment.
Refinancing to lower your mortgage rate
One of the best things about refinancing your mortgage is that you can lower your rate, saving you money in the long run. Mortgage rates can change, and so can your financing options, so keep an eye on them. Make sure you know about any penalties you might face if you break your mortgage contract, but in general, a savings of 0.5 percent or more should save you money in the long run.
Refinancing to consolidate debt
Those who have a lot of debt from many loans can consolidate all of their debts into one loan through mortgage refinancing. The equity in your home can help you get a lower interest rate and pay off high-interest debts like credit cards, car loans, or personal lines of credit at a lower rate.
Refinancing to convert to a variable or fixed-rate mortgage
If the market’s interest rates change, changing from a variable to a fixed-term mortgage could be good for the borrower’s money. This strategy depends on how long people will stay in their homes. In short-term situations, switching to a variable mortgage rate can be good for the borrower’s money. The break fees for variable-rate mortgages are also very good if you sell your house.
Refinancing to shorten loan terms
Again, homeowners can refinance their loans to get one with a much shorter-term without changing their monthly payment by taking advantage of falling interest rates.
If you’re considering refinancing to get a reduced interest rate before the term of your loan expires, numerous variables must be considered. Mortgage interest rates in Canada have been at or near record lows for many years. The aftermath of the 2008 and 2009 real estate crash prompted banks to tighten lending standards while simultaneously lowering interest rates as low as feasible to stimulate investment by those who qualified. Interest rates were lowered due to action by the Canadian government (along with others), which sought to avert a severe recession. Even today, interest rates remain very low, making refinancing an enticing alternative for those who have not taken advantage of the historically low rates.
Amansad Financial is a digital brokerage that can get you accepted for your mortgage as a digital broker. We can submit your file to many lenders with one click. We will work for the best offer for you. Amansad Direct Lending Group offers mortgage financing solutions that banks would not consider. We provide our customers with the optimism necessary to overcome urgent financial problems and ensure a brighter future.
We think that the borrower should choose who they deal with. We can give you the most competitive interest rates by generating deal tensions with the lenders!