There are many reasons why homeowners in Toronto consider
refinancing their mortgages.
Why Refinance Your Mortgage?
There are many reasons why refinancing
home may be right for you. First, it’s important to understand exactly what
refinancing a mortgage means. When you refinance, you take out a new mortgage
that pays off your old mortgage and replaces it. At a glance, that may seem
pointless. After all, you still end up with a mortgage. The difference is that
you may have a lower monthly payment or a lower interest rate.
Even with the low rates we’ve experienced for years, there
are still fluctuations. You may not have had access to the best rates when you
signed or renewed your mortgage; refinancing mortgages gives Toronto homeowners
the chance to get a lower interest rate. This can translate into lower monthly
payments, or, if you keep your payment at the same level, you can pay off the
principal faster with more money applied to it instead of the interest each
Another reason for refinancing a mortgage is to pay it off
sooner. If you’ve inherited money or had an influx of cash, you should be able
to make an extra payment equal to a certain percentage of the original
mortgage. You are allowed pay up to a certain amount each calendar year without
facing penalties. If you want to pay more, it’s worth your while to refinance
your mortgage so the payments are bigger or for a shorter amortization period.
The money you save in interest may outweigh any financial penalties you may
face for paying it off before the initially agreed-upon number of years.
If you feel like your debt is insurmountable and are using
credit cards to make up the difference each month, refinancing your mortgage
can help you consolidate debt. It lets you spread your repayment over a long
period of time and often at a lower interest rate than a personal loan. The
interest rate offered on a mortgage is considerably lower than the regular rate
on credit cards and store cards.
Access Your Equity
Equity is the difference between what you still owe on your
mortgage and the current market value of your home. Many people don’t realize
that the equity they’ve built up is available to them when they need it.
Talk to a real estate professional or look at listings for
similar homes in your neighbourhood to get an idea of what your house is worth.
You may be able to refinance your mortgage, taking advantage of your equity to
put cash back in your pocket.
Refinancing your mortgage can help you increase the value of
your Toronto home. You can use the money for home renovations and repairs,
raising your home’s value. Given Toronto’s skyrocketing real estate prices, it
may be less expensive to renovate your existing home than to try and move into
a new one.
If you’re wondering what new mortgage payments will be like,
use a mortgage
payment calculator. Enter the amount you’d like for your refinanced
mortgage and play around with different amortization periods and interest
rates. You’ll be able to see what monthly, biweekly, and weekly payments may
Refinancing Toronto mortgages helps homeowners consolidate
debt or tap into their home’s equity for renovations and investments.