VP Mortgages – Five Facts About Refinancing Your Mortgage
If you are looking for a way to save yourself money on interest payments or consolidate high-interest debts, then mortgage refinancing can be a powerful tool. If you are considering going this route, however, it is always best to work with an experienced mortgage broker because done the wrong way, Mortgage refinance may end up costing you more than it saves you.
Before you refinance, consider the following:
- Refinancing can be a smart way to take advantage of lower interest rates
If interest rates have dropped since you last renewed your mortgage, then you could potentially save money by refinancing. This is especially true if you have other high-interest debt which you can consolidate into your mortgage. For many Canadians, mortgage refinance can save them thousands of dollars per year in interest payments.
- Refinancing can be a good way to extend or reduce your amortization period
Did you recently get an increase in your earnings and now want to pay off your mortgage more quickly? With refinancing, you can reduce your amortization period. The same is true for the opposite. If things have become financially tighter, then refinancing can help you extend your amortization period and reduce your monthly payments.
- You will need to consider the penalties
Refinancing means you are breaking your current mortgage for a new one – and this means there will be financial penalties. The question is whether the penalties are more or less than the money you will save by refinancing. Your mortgage broker can help you figure this out.
- Your credit matters
If you don’t have very good credit, then it is unlikely that you’re going to be able to refinance your mortgage with a traditional lender. For example, if you have just lost your job, declared bankruptcy or are self-employed and can’t verify your income, then a regular bank probably won’t want to take a chance on you.
Fortunately, mortgage brokers work with a number of alternative lenders that specialize in helping those who are self-employed or who have poor credit. Your mortgage broker can help you find a reputable lender that is right for your situation.
- Shopping around is important
Just like shopping around for a first mortgage is important, so is shopping around for refinancing. Many people make the mistake of simply refinancing with their current lender, but this often means they won’t get the best possible interest rate. By working with a mortgage Agent who works with many different lenders, the shopping is done for you!
If you are thinking about refinancing your mortgage, then contact Varinder Masaun today at (416) 721-2550.