Getting Your Home Refinancing 2022
One of the most exciting parts about life is that it is never static. This is one of the reasons that mortgages are available on such short-term contact (such as standard 5-year) so that you can adjust your mortgage plan over time to best suit your needs. However, in some cases you cannot wait so long for them to end. In fact, roughly ten out of ten homeowners with the typical five-year rate mortgage break their terms within three years.
Why people break their mortgage
There are a variety of reasons one might need to have their home refinance their mortgage. You may be wanting the equity in your home for renovations or you may want to pay off some unpayable debt. Maybe you just can’t wait until your term is up due to life events occurring such as divorce, a new relationship, kids going off to college or having unbearable financial burdens weighing you down. The point is that there are many excellent reasons for refinancing your mortgage and Concept One Financial Group will help find the right option for any given situation – so getting expert advice is critical before making any hasty decisions about future.
What to consider before deciding to refinancing your home
If you are deciding to home refinancing 2022 , it is important to understand that if you do this during the term you will be breaking your mortgage agreement and there are penalties that come with that. If at all possible, it is best to wait until the end of the mortgage term before refinancing.
If you cannot wait, It’s important to fully understand how your lender is going to calculate penalties for breaking a fixed-rate mortgage. Some banks will take the posted rate at the time of signing, subtract the discount you were given from that and then that amount will be applied to interest owing. Other lenders such as credit unions will use an adjusted three-month term which could cost more than other penalties.
Beyond the penalties, there are a few other points to consider before refinancing:
- You can tap into 80 per cent of the value of your home
- You cannot qualify for default insurance which can limit your lender choice
- You would have to re-qualify under the current rates and rules – including passing the “stress test” again
Benefits of Refinancing Your Home
Regardless of why you are looking to refinance, it can come with a host of great benefits when done properly!
1. A lower interest rate
Depending on where you are in your mortgage term, you can refinance to get a better rate which is especially beneficial when obtained through a mortgage broker. Quite simply, there are more variety of different options a mortgage broker has access to overall, as home loans offered by banks only come from that specific bank themselves and at their typical corresponding interest rates.
2. Consolidating Debt
There are many types of debt including credit cards, lines of credit, school loans, and mortgages. However, different types of consumer debt have different interest rates than those you would pay on a mortgage. That’s why refinancing is so beneficial. Free up cash to help repay your debts by increasing your mortgage payment if necessary (keep in mind that you need at least 20 percent equity in your home to qualify).
3. Modifying Mortgage
The beauty of life is that it is ever-changing! Don’t get scared if you find yourself in a position where you are unable to make your mortgage payments on time. Your bank will understand and they want to help you succeed so that you can stay in the house. Maybe you came into some extra money and don’t want to waste it – put it towards your mortgage instead! It is always best do this when your mortgage term is up.
4. Utilize Home Equity
One way you can build up equity in your current home is by taking out a mortgage so that you can finance new renovations and additions to the current property. As the value of your home increases over time, the amount of equity increases as well. But just like when it comes to any other type of loan, you have to make sure you are getting one when you truly need money and not before!
Work with Mortgage Broker For More Options
Powered by Dominion Lending Centres, Concept One Financial Group is a team of mortgage professionals work for our customers – not the lenders – to ensure our customers receive the best rates and products available in today’s marketplace. Whether they are looking to purchase their very first homes or upgrade to a new home, mortgage renewal, refinance for equity take out, purchase investment properties.
Our lending solutions are catered for the conventional, self-employed, new immigrant, and non-resident; residential and commercial mortgages; Insurable and uninsured. As is customary in the field of Canadian mortgages, we deal with big banks, smaller lending institutions and private lenders. Each client’s financial needs differ, which is why we work with a variety of lenders.