Mortgage in Canada: Is Refinancing in Your Horizon?
If you have a mortgage that is a few years old then it is about time you started considering refinancing. The current mortgage refinancing rates are extremely beneficial for savvy Canadians looking forward to paying off their mortgages sooner or to lower house payments significantly.
Mortgage Refinancing Rates Are In Your Favor!
Yes, you committed to it all those years ago. But mortgage doesn't necessarily have to be a jail sentence. You have better options, so why not go for them? Get lower rates, consolidate your debts and take advantage of your home equity. In fact, home owners are allowed to access up to 80% of their home's value by refinancing.
Now imagine this. You have 20 years left to pay on your mortgage and you refinance at much lower mortgage refinancing rates with a 15-year mortgage. This way, your monthly payments will remain pretty much the same. But as the length of your loan is much shorter, you will be paying a lot less in interests over this time.
If you have a mortgage in Canada, you can take advantage of the incredibly low Mortgage Refinance Rates and easily lower your payments or shorten the length of your loan term.
Canada Home Buyers Can Get Mortgages On The Cheap!
It is no secret that these rates won't last for long. And that makes “Right Now” the best time to refinance!
Banks have provided the Canadian public with such favorable mortgage refinancing rates because money has never been cheaper in Canada. The Bank of Canada's current interest policy encourages debt accumulation and they have steadily provided Canadians with some great incentives to fulfill their home ownership dreams.
Chances are that any fixed rate mortgages that you signed up for several years ago have become significantly lower. This is why we advise that anyone currently tied down by a mortgage rate of 3.60% or higher should seriously consider breaking their contracts early and refinancing. There are plenty of mortgage bargains to be had, subject to penalties and time to maturity, which must be considered before finalizing a refinancing decision.
Fire Up The Refinancing Process: Your Options!
There are several ways you can bow out gracefully from your existing mortgage contract. Breaking your mortgage contract before the term is over isn't your only option. You can also take out a home equity line of credit or you can opt for blending and extending your mortgage with your current lender!
It is important to sit down with an experienced professional to arrive at a good decision. Here's a quick intro to all the options available to you.
▪ Breaking the Current Mortgage Contract
In this case, you terminate your existing mortgage in Canada and take up a brand new one. Chances are that your existing lender will levy some prepayment charges on you, but if you are choosing to refinance with the same lender, you can ask and see if your lender will reduce these charges.
There may also be other charges. Before finalizing this option, check and see if you will be paying administration, appraisal, reinvestment and legal fees.
▪ Adding a Home Equity Line
When you want access to your home equity, you can get it via a home equity line of credit. Talk to your existing lender for this facility. This provides you with a line of credit that has a draw period of 10 years usually. You can borrow as much as you want within this period, subject to the maximum limit to your credit line.
▪ Blending and Extending the Mortgage
Your lender can extend the length of your current mortgage and blend your old interest rate with the new term’s rate. The process is known as a “blend and extend” early renewal option.
Blended rates are bound to be higher than other mortgage rates in the market, so it is important to make sure that you are getting a good deal by breaking your mortgage in this manner.
Costs of Refinancing Your Mortgage: The Basics!
Do you want to access the equity in your home or are you interested in lowering the interest rates?
Once you have decided on why you want to take advantage of the new Mortgage Refinance Rates, you will be able to find out how much it is going to cost you.
You will have to pay for a lawyer and incur legal charges no matter what your choice. But if your mortgage balance is larger than $200,000, chances are that your broker or lender may be willing to cover these costs.
A prepayment penalty may be levied if you break your mortgage in the middle of your term. Expect to pay more than 3 months of interest or an IRD (Interest Rate Differential Payment) for a Fixed Mortgage Rate. Prepayment penalty for Variable Mortgage Rates is 3 months interest only.
How Do I Apply For Mortgage Refinancing On-line?
Find professional help that you can trust. It is important that they know mortgage in Canada thoroughly and are prepared to apply their experience to your situation. Remember that there are a number of factors that can influence your application for new Mortgage Refinance Rates. These include your current credit rating, employment, etc. You may also be asked to show a proof of savings, credit reports, along with other paper work that clearly depicts your monthly work load.
Even for those with credit, that is not so stellar, and chances are that there is a way to find refinancing.
At Syndicate Mortgages Inc., we can sit down with you and determine which refinancing option is the best in your case. Together, we will find the most appropriate refinancing rates to renegotiate.
We'll let you know fair and square if it is the right time to renegotiate your mortgage in Canada or whether your current mortgage is great for your financial situation as it is. We can assist you in selecting the right mortgage refinance solution for your current financial status.