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Intro: More and more homeowners are making the callto their mortgage broker to inquire aboutrefinancing. Mortgage refinancing can help youaccomplish various financial objectives, but it isn’tsomething you should just dive into withoutthinking about it first.It is an action that isn’t the right move foreveryone, but for those in the right position it canprovide obvious benefits. That’s why a quick callto your mortgage broker is a good idea, so thetwo of you can see if any of the benefits apply toyour situation.
Potentially LowerRateOne of the possible benefits of mortgage refinancing is alower mortgage rate. If you signed up for a fixed mortgagea few years ago and the rate you agreed to has dropped,you could end up saving money.Anyone who is seeking a new mortgage always looks forthe lowest rate, and for good reason. If you can get a ratethat’s a few points lower, you will save quite a bit over thecourse of the mortgage. If the rates have droppednoticeably since you signed, refinancing may be a goodidea.
LowerMonthly PaymentsFor many people, refinancing a mortgage is a great way toreduce their monthly payments. If you’re strugglingfinancially, or if you want to free up cash for other things, alower monthly mortgage payment will help.If you have paid down a decent amount of the originalmortgage, and if you feel like you could get a refinance ata lower interest rate, it just may be worth a try. A quick callto your mortgage broker will help you figure out if it’spossible.
Convert YourRateIf you originally sought out an adjustable rate mortgage,and now you want a fixed rate, you may be able to convertthe rate through refinancing. It’s not uncommon for anadjustable rate to seem attractive at the start, and thenmore and more stressful as times rolls along.Some people find keeping up to the fluctuating ratesharder than they thought, and they just want somesteadiness and normalcy after awhile.
Paying Off DebtsIf some of your other debts have grown in the time you’vehad your mortgage, you could use the extra cash from arefinance to pay them off. These may include credit cards,lines of credit, loans and similar credit amounts.Having several different debts floating around all the timecan get unnerving and even confusing, so being able totake care of several at once is always a benefit.
Improve YourCredit ScoreYou can improve your credit score with a mortgagerefinance in a few different ways. Sometimes, simplylowering your monthly payments can help out your creditscore all on its own. Paying off your other forms of creditcan help, even having more available cash so you won’thave to use credit for basic purchases can help.
Increase Market ValueYou can also use the money you get from refinancing torenovate and ultimately increase the value of your home.This can work if you’re thinking of selling and you know itneeds an update, or if you just want a more modern andcomfortable space to live in.Either way, the value of the home will increase andrefinancing was the catalyst that got it all started. If this, orany of the other refinancing reasons appeals to you, takethe time to contact your mortgage broker. Even if youthink you’re not eligible, you never know for sure until youask.