Sandra Forscutt Mortgages

Welcome To Our Mortgage Educational Blog About:

How Do You Refinance A Mortgage In Edmonton

The term mortgage refinancing describes the act of taking out a new mortgage in order to pay off the existing one and consolidate debt, typically when the interest rate on the old mortgage is higher than that of the new one. 

As with most forms of debt consolidation, the idea behind refinancing is to lower your monthly payment and save money on interest over time. In this article, we’ll look at how mortgage refinancing works in Canada and how it can be an effective way to save you money and simplify your financial situation.

However, at the heart of this process lies one simple question – why would anyone want to refinance their mortgage? 

With this question in mind, let’s look at how mortgage refinancing works in Canada and the many benefits you could be missing out on by not considering it an option.

Know your options

Whether you’re looking to access more cash or simply wanting to switch lenders, mortgage refinancing can be a good option. But there are a few things you should know before you decide if it’s right for you. 

First of all, do some research on your current options to ensure that your existing rate and terms can’t be improved upon. A quick call or email is all it takes, so don’t put it off: get started today! 

Ultimately, any refinance decision is about improving your situation—whether that means getting better rates or reducing your monthly payments.

What happens during the process of refinancing my mortgage?

When you refinance your home, you simply replace one loan with another. That means it’s no different from going to your current bank or financial institution and getting a new loan for your home. 

One important thing to note is that when you refinance your home, it doesn’t mean that you are buying a new house. Instead, you are just borrowing more money from your lender to pay off your current loan (or vice versa).

Why should I refinance my mortgage?

Edmonton Mortgage refinancing is one of those financial actions that is kind of confusing but also kind of good. 

However, the bottom line here is that it’s really not all that hard to refinance your mortgage, and it could end up saving you quite a bit of money over time. 

Mortgage refinancing helps you borrow more money.

If you already have a mortgage, you might be able to get a little more money by refinancing it. 

This means that you’ll essentially borrow more money on top of your existing balance and pay back a new loan with a different interest rate and term. 

Keep in mind that your monthly payments will increase (you’ll be paying off both loans instead of just one). You also need to make sure that it makes financial sense for you to do so. 

Talk with your bank or financial institution about what kind of interest rates they offer—and don’t forget about any closing costs associated with applying for a new loan.

Mortgage refinancing helps you get a lower interest rate.

Mortgages are paid off over a set number of years—usually 25. So, if you want to lower your monthly payment and shorten your amortization period, you’ll need to do mortgage refinancing. 

When you do, you’ll get a new agreement that resets your monthly payments at a different interest rate. That means less interest paid overall and potentially thousands of dollars saved (plus some time shaved off paying for it). 

And if that’s not enough to convince you, remember that there is no penalty or fees for refinancing, so why wouldn’t you take advantage of one of these deals when they become available?

Mortgage refinancing helps you change your mortgage type.

Mortgage refinancing is a great way to change your mortgage type. Several different options are available, and these depend on your current financial situation, what you’re looking for, and your needs. 

You may be able to get a lower interest rate, switch from a variable to a fixed rate, or even pay off some of your debt with an equity loan. After all, lately, Canadians have benefited from the best-fixed rates ever in decades!

Talk to an expert today and ask them how they can help you change your mortgage type with their services. We will be able to explain more about how it works and if it would be beneficial for you at all.

Mortgage refinancing can help you with renovating your home.

Some homeowners might find that they’re better off saving their money and using it to renovate their homes rather than refinance. 

In fact, if you know you want to renovate your home but don’t have enough money saved up yet, taking out a fixed-rate mortgage can give you access to some funds while also locking in a low-interest rate.

Remember, though, that unless you have a steady income and good credit rating, borrowing too much on your home loan could lead to problems down the road when rates inevitably rise again. 

If your current home is worth less than what you owe on it, or if you expect prices to drop further over time, it might be worth having a conversation with us about whether or not refinancing your home makes sense for your situation.

Mortgage refinancing helps you invest.

One of the most common reasons people refinance their mortgages is to access cash from a line of credit attached to their home equity. This is usually done for two reasons: to buy a more expensive home or as an investment vehicle. 

If you are looking at making a new real estate purchase and taking out less than what your current home is worth, you can use cash from your home equity line of credit (HELOC) to help fund that purchase. 

You’ll be able to pay off any outstanding debt on your mortgage, and your HELOC will be treated like an amortized loan so long as you pay it down within five years.

 

What are some things I need to know about mortgage refinancing?

Mortgage refinancing is a great way to lower your monthly payment. But, it’s not right for everyone. Here are some things you should consider before deciding whether or not to refinance your home loan.

  • How long have you been with your current lender?

The longer you’ve been with a lender, usually means they have more information on your financial standing, so they’re able to determine if you’re a good candidate for mortgage refinancing. They may also be willing to offer you an incentive (like a low-interest rate).

  • What will happen to my rate if interest rates rise?

Mortgage rates change frequently, and many lenders that offer prepayment options won’t change them unless market conditions change significantly. 

  • Are there any costs of refinancing my mortgage?
Interest rates and potential fees (legal/registration fees etc.) of mortgage refinancing vary depending on several factors, including your current interest rate and how long until your current fixed-rate period expires. However, some brokers can cover the costs for you, depending on the situation.

 

Mistakes to avoid when refinancing a mortgage.

Refinancing a mortgage might seem like a simple process, but several mistakes could come back to haunt you. Many of these mistakes involve cutting corners and not doing your research. That’s where a mortgage broker in Edmonton can help!

Mistakes such as these could lead to an increase in your debt-to-income ratio, putting you at risk of defaulting on your loan and losing your home. To avoid making these common errors, take time to learn about mortgage refinancing before you go through with it. 

Contact Envolve Mortgage Group today for help with financing options and answers to all of your questions about how to refinance a home within Edmonton or anywhere in Canada. 

We’re happy to help!

If you need more information about the topic or any other questions about home buying mortgages, don’t hesitate to contact us.

Are you ready to apply for mortgage refinancing? Reach out to me directly or start your application here: www.sandraforscutt.ca/mortgage-application/

 

Recent Educational Blogs

What is the most popular mortgage type?

What is the most popular mortgage type?

What is the most popular mortgage type?Canadians, and Edmontonians, are obsessed with real estate. And why shouldn't we be? Our country boasts one of the hottest housing markets in the western world. While you may think you know everything there is to know about...