Refinance
A mortgage solution which can help you restructure when interest rates (or life!) changes. Refinancing may help you jump into a better financial position depending on your unique situation.
Refinancing Overview
As the years go by your life pay face certain challenges and opportunities; your desires within a mortgage agreement may shift with them.
Refinancing a mortgage offers the opportunity to restructure your mortgage before your renewal date in a way which better reflects your current lifestyle and goals.
Refinancing often entails switching from a fixed or variable rate, extending your amortization, or adjusting other mortgage factors which could help save you money.
So what does it mean to refinance your mortgage? Let’s find out!
The 411 of Refinancing a Mortgage
To refinance (or ‘rollover’) a mortgage sounds like an intimidating option, especially when you likely spent a significant amount of time deciding on the financing for your original mortgage.
When refinancing a mortgage there is no change in title to the property, only a shift in how the balance of the mortgage is being paid off. There are many reasons a person may find themselves seeking to refinance their mortgage, most of which exist to benefit you as the home owner.
Some prominent reasons for refinancing a mortgage may be that:
- The original mortgage is set to mature and as part of the agreement with the lender, the outstanding principal must be repaid (if a full payout isn’t available, the mortgage must be renewed or refinanced)
- You would like to renegotiate your mortgage based on new competitive rates which may save you money as a home owner
- You have high-interest debts that would be beneficial to consolidate into a lower interest mortgage payment
- You are interested in renovating, expanding upon, or endeavoring on a project which would add equity to your property, but you require extra money through a line of credit to do so
- You’d like to free up personal living funds be locking in with an extended amortization period.
- You’ve experienced a job loss/promotion, divorce, or other external factor which has lead you to require an adjustment in monthly payments.
Considerations And Costs For Refinancing A Mortgage
Hearing the benefits of refinancing a mortgage may sound like an opportunity, and it can be!
But, it’s also important to work alongside a licensed mortgage broker (such as myself!) who has a full understanding of both the process of refinancing, in addition to the knowledge of any implications that refinancing may involve for you.
What looks like a great offer at face value may actually entail costs or penalties. Chatting with a licensed mortgage broker about refinancing can help to alleviate any surprising fees, and allow you to make a well-informed decision.
Common fees associated with refinancing are:
- Appraisal, or survey costs.
- Legal or broker fees.
- Penalties (which will be stated in your mortgage agreement – ‘breaking’ this agreement early can lead to pre-payment penalties).
- Costs incurred in the event you decide to switch to a new lender.
- Registration fees for the mortgage.
If your family member refinanced their mortgage and is extremely happy with the outcome, it doesn’t mean that you'll also be just as happy with the outcome of refinancing your own mortage.
A proper assessment needs to be completed on your current lender agreement and personal state-of-affairs to determine whether refinancing is a recommended option.
As a licensed mortgage broker, I've helped many valuable clients refinance their mortgages, and guided many clients towards other mortgage solutions which were a better fit!
Is There A Golden Rule Of Thumb For Deciding Whether To Refinance?
Refinancing is a complex decision and it adds different risks and benefits for each borrower.
Connecting with a licensed mortgage broker is a valuable way to mitigate risks and ensure that refinancing is right for you.
After factoring in costs and pre-payment penalties associated with refinancing, you may end up saving money or it may end up costing you money.
If I determine that refinancing could jump you into a significantly better financial situation with your mortgage, it's definitely a mortgage solution we'll take a closer look at and consider.
Increase Your Chances Of An Optimal Mortgage Refinancing Deal
Refinancing options are influenced by the economy, deals the banks/lenders have available, and your personal borrowing situation.
With that being said, some factors for optimal refinancing are within your control:
Maintain a GREAT or EXCELLENT credit score
Pay your mortgage payments (and other bills) on time, ‘live within your means’, have a low debt-to-income ratio etc.
Work with a licensed mortgage broker
licensed mortgage brokers have access to countless lenders and mortgage programs, increasing your chances of a desirable refinancing solution
Refinance at an optimal time
If you're refinancing your mortgage by choice (and not because you need to), it may be wise to wait until your renewal date instead
Understand that a lower interest rate doesn’t mean you will save money
This is a bit of a complex concept because you would think that a lower interest rate than what you currently hold MUST save you money, but depending on the term of the contract and the amortization period, it may end up hurting your pocket in the long run.
"Is Refinancing A Simple Process?"
Refinancing can be a very easy process when working with an experienced licensed mortgage broker (such as myself)!
As a licensed mortgage broker, I'll conduct the tough leg work for you.
I first work with you to assess your mortgage goals and then match them with a valuable mortgage solution. After our discussion, I'll request appropriate documentation from you. From here, you can sit back and relax while I negotiate mortgage deals with lenders on your behalf to secure a fantastic mortgage deal with your name all over it.
The Next Steps For Refinancing Your Mortgage
Reach out to myself Kyle Benzies (licensed mortgage broker) for an expert discussing over whether refinancing your mortgage is in your best interest.
I guarantee that I will put you AND your needs first; I don’t work for the banks, I work for my clients and I want them to feel accomplished and happy with whatever mortgage avenue we decide on.
Depending on your unique situation, refinancing may not be in the cards. If refinancing isn't an optimal option, I have access to endless mortgage solutions which may suite your goals better.
Give me a no-risk call to discuss whether refinancing your mortgage is right for YOU!
***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for first time buyers***