One of the most popular reasons to refinance a mortgage is to get a lower interest rate. Basically, you do it to swap out a higher interest rate for a lower one, which makes perfect sense. You can save a considerable amount of money on your lower monthly payment with a lower interest rate as well as saving a ton of money in interest over the years.
But even as interest rates rise, it might make sense to refinance your mortgage. Daisy Raouph, your mortgage advisor in Pickering, offers reasons it might make sense for you to refinance your mortgage.
To Reduce the Loan Term
There are those homeowners who wish to aggressively pay down their mortgages. That is, they don’t want to take 30 years to pay off their home. There are benefits in refinancing from a 30-year fixed to a 15-year fixed mortgage.
Often, shorter-term mortgages come with better interest rates, so you can pay off your loan much faster without having to pay a lot of money.
To Increase the Loan Term
Not everybody wants to pay down their mortgage as fast as possible. Some people find it difficult to make large payments every month, so they choose to refinance a 30-year term in order to lower their monthly mortgage payments.
Go Fixed to Adjustable
Many homeowners refinance to switch from a boring fixed rate to an adjustable one. It is also possible to refinance from an adjustable rate to another adjustable rate, which will reset your fixed rate period.
Go Adjustable to Fixed
This is another popular reason to refinance a mortgage. If interest rates are on the rise, it makes sense to switch from an adjustable mortgage to one with a fixed rate.
Get a Lower Interest Rate
This really is a no-brainer. If you want to save money, a mortgage with a lower interest rate will save you a lot of money. The only downside is that you reset the clock on your mortgage term. Of course, you can always go with a shorter term should you choose.
Improved Borrower Profile
Things change over the years. You may have improved your credit scores for example. If your borrowing profile has changed for the better, it could help you get a better loan.
If you have a lot of equity in your home, you may wish to refinance and get some money. The money you gain from a refinance could be used to pay down debt, remodel your kitchen or complete some other home improvement project you have been wanting for years.
Home improvements will also boost the value of your property.
Because the Canadian housing market is constantly changing and rates change often, being knowledgeable about the best mortgages available is important; that’s where we come in.
Serving Toronto, Pickering and the surrounding areas, Daisy Raough and the rest of the team of financial advisors and mortgage brokers specialize in financial services and finding mortgages that suit their clients. Contact us today.