If you need access to additional funds, using the equity in your home can be a great way to borrow the money than taking out a traditional loan.
Reasons to Consider Refinancing Your Mortgage
1) To take advantage of low interest rates
Don’t let penalties deter you; first, know the numbers. Breaking your contract for a lower interest rate can save you money over time, depending on the penalty and the size of your outstanding mortgage. If you hold a variable rate mortgage, then expect to pay a penalty of three months interest, and if you hold a fixed rate mortgage, then you will pay the greater of three months interest or interest rate differential penalty.
2) To access the equity in your home
By refinancing, you can access up to 80% of your home’s value less any outstanding mortgages. That’s extra money for investment opportunities, home renovations, or your children’s education. There are several ways to access this equity including breaking your mortgage, taking on a home equity line of credit or blending and extending your mortgage with your current lender.
3) To consolidate debt
If you have enough equity in your home, you will be able to pay-out high-interest debt through a refinance. For example, if you have a number of outstanding debts, such as a car loan, a line of credit, or credit card bills, you may be able to consolidate all of the debt through the variety of refinance options available.
4 ) Renovations
Since your home is likely your most important investment, renovations are a great way to increase your property value and also make daily living more comfortable. When thinking about funding sources, keep in mind the type of renovations you want to perform, the amount of money you need, and how long you anticipate paying off these costs.
Understanding your finance options can be complex. It’s our goal to make sure you have everything you need to make the right choices.
To review all your available options, contact the team at Mortgages of Canada. There is no obligation to apply so call today.