Getting a new mortgage to replace the original is called refinancing. Refinancing is done to allow a borrower to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created.
Have you ever wondered if you can refinance your Edmonton property to pay out debt and take advantage of low-interest rates? If you bought your home when prices were low, you may be able to access equity from your home. Perhaps you want to take advantage of lower mortgage rates, borrow money for investments or pay down debt. Mortgage Tailors is here to help, give us a call to get the process started at (780) 244-0505.
Refinancing is the process of getting a new mortgage with the intention to reduce monthly payments. You can take advantage of low-interest rates, take cash out for investments or consolidate high-interest debt. If your home has equity available, then we can refinance. Equity is the difference between the amount owed to your current lender and the current value of your property. You can refinance up to 80% of your properties appraised value.
Benefits of Refinancing
Refinancing provides an opportunity to pay out higher interest credit cards, vehicle loans, therefore, saving you hundreds in monthly payments. It allows you to invest your money as you wish, whether it’s RRSP’s, buying a rental property or renovating your home, therefore increasing its value and your investment!
We’ll review your current situation and what you want to achieve, and create a plan on how we can help you reach your goals. Our goal is to refinance your Edmonton home and save you as much money as possible. We understand mortgages and how important it is to make the right financial decisions.
When you refinance, you’re able to modify your mortgage so it adapts to your changing lifestyle. You even have the ability to change from an adjustable-rate mortgage to a fixed-rate mortgage to protect yourself from future payment increases.
Should You Refinance?
However, refinancing isn’t the best option for everyone. There are particular situations where you will benefit more from refinancing than others. It is beneficial if you have been in your home for more than 5 years as the savings can offset the cost of refinancing and you may have equity.
Since house values tend to increase over time, the value of your property may be higher than when you purchased it. If this is the case, we can refinance to access some of this equity to provide fast access to cash. Contact your Edmonton Mortgage Broker Eva Neufeld at 780-244-0505 to see what options are available to you.
If you are planning to do renovations to your home, refinancing to access some equity is a great place to start. The equity you withdraw from your property can be used towards home improvements, ultimately increasing your property value.
If your financial situation has changed, you may want to consider refinancing in order to update your mortgage terms. You may want to turn a variable rate mortgage into a fixed-rate mortgage or shorten the amortization to pay off your mortgage faster.
I’ll explain how fixed rates versus variable-rate mortgages work and which is the best option for you. We’ll show you how fixed rates move up and down and whether locking in for a 5 year fixed rate is your best option. I’ll explain how banks calculate interest rate differential penalty off posted rates which means bigger penalties for you.
Lenders can calculate penalties based on contract rates or posted rates. Posted rates give a higher payout penalty. It’s important to understand which lenders do this. We will go over how variable-rate mortgages move with the bank’s overnight prime lending rate.
A variable rate mortgage moves when the Bank of Canada releases its decision if it will raise rates, decrease rates or keep them the same. They meet every 6 weeks to decide what they will do. The best part about a variable rate mortgage is how transparent the penalty is. It is only 3 months interest penalty if you break the mortgage anytime within the term.
Our team at Mortgage Tailors will go over all these options, run payment scenarios to help you understand your mortgage choice and help you achieve your goals.
What Are The Advantages Of Refinancing?
One of the main advantages of refinancing regardless of equity is reducing an interest rate. Often, as people work through their careers and continue to make more money they are able to pay all their bills on time and thus increase their credit score. With this increase in credit comes the ability to procure mortgages at lower rates, and therefore many people refinance with their mortgage companies for this reason. A lower interest rate can have a profound effect on monthly payments, potentially saving you hundreds of dollars a year.
What We Bring To The Table
- Get cash out for any purpose
- Consolidate high interest credit cards
- Lower your monthly payments
- Renovations and home improvements
- Programs for self-employed
- Canada’s best prepayment options
Looking for information about a mortgage refinance in Edmonton? Mortgage Tailors are your trusted Edmonton mortgage brokers. We help you with refinancing and securing the best mortgage rates. Call us at 780.244.0505
If you need a Debt Consolidation Loan, a Home Improvement Loan, or even a Small Business loan, Mortgage Tailors has a solution to fit every situation! Apply Online Today!