MORTGAGE REFINANCE

Mortgage Specialist in Richmond Hill & Aurora, ON

Mortgage refinancing allows borrowers to pay off an existing loan and replace it with a new one. This process can help homeowners improve their financial situation by getting a lower interest rate, accessing home equity, consolidating debt or changing their terms.

WHAT IS A MORTGAGE REFINANCE?

A mortgage refinance acts as a brand-new home loan that is used to pay off an existing one. While it may seem counterproductive to take out a new loan when a borrower has already been paying off another one, Mortgage Refinancing can offer a number of advantages that make it worthwhile.

  1. To Lower Your Monthly Payments

    Refinance to a longer-term mortgage

    If today's rates are lower than your current rate, refinancing to a longer-term mortgage with a lower rate will result in lower monthly payments.

    Refinance to a lower rate

    If you refinance the same loan term at a lower rate, you'll have lower monthly payments.

    Be sure to review the total interest paid on the amount you originally borrowed and the refinanced amount to ensure that you are comfortable with this overall expense.

  2. To Pay Off Your Loan Sooner

    Refinance to a shorter-term mortgage

    You can take advantage of lower rates and switch to a shorter-term loan, allowing you to pay off your loan sooner. You may have a higher monthly payment, but your total interest payment will be reduced significantly by switching to a shorter-term mortgage.

    Make additional payments on your current mortgage

    You can pay off your loan sooner without refinancing by simply making additional payments on top of your regular, monthly mortgage payment. Additional payments can add up quickly, take years off your mortgage and reduce your overall interest payments.

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DEBT CONSOLIDATION

Mortgage Specialist in Richmond Hill & Aurora, ON

A cash-out refinance

A cash-out refinance usually means money in your pocket to help make home improvements, consolidate existing debt, buy a new car, pay college tuition or finance other goals. With this kind of refinancing, you will pay off your current mortgage loan and take out a new mortgage at a higher amount. You will need to have reasonable equity in your home to make this possible.

For example, if you took out a mortgage of $600k in 2017 and have paid some of it down.

You may also want to consider a Home Equity Loan or Line of Credit, which offers much lower closing costs than mortgages/a cash-out refinance and allows you to get the cash you need from your home's equity. This is also a quicker process if you’re worried about turnaround.

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