Mortgage Refinance

Use your home loan to achieve your financial goals

Mortgage Refinance

Share this article:

Mortgage Refinance: Use Your Home Loan to Achieve Your Financial Goals

Mortgage refinancing involves the process of securing a new mortgage to replace your existing one. Homeowners opt for refinancing for various reasons, including to obtain a lower interest rate, shorten their mortgage term, reduce overall interest payments, consolidate debt, finance significant purchases, or manage financial emergencies. By securing new terms on your existing home loan, you often find that the savings from a new, lower interest rate can significantly outweigh any prepayment costs associated with refinancing. In fact, a 1% savings on your interest rate can be a compelling incentive to pursue refinancing.

Refinancing your mortgage can be a strategic financial move, providing you with the opportunity to restructure your loan to better align with your goals and potentially save money in the long run. It’s important to understand the process and evaluate whether it’s the right choice for your unique circumstances.

The Process of Mortgage Refinancing

Refinancing your mortgage starts with understanding your current financial situation and how a new mortgage can better align with your goals. The process involves replacing your existing mortgage with a new one, often with different terms. It’s essential to evaluate these new terms carefully to ensure they help you achieve your financial objectives, whether that’s saving money, reducing your loan term, or consolidating debt.

To begin the refinancing process, you’ll need to gather necessary documents, such as proof of income, credit history, and property information. You’ll then work with a mortgage professional or broker who will guide you through the application process, including a credit check, appraisal, and verification of your financial information.

Once you’ve been approved for the new mortgage, you’ll review and sign the loan documents. The funds from the new loan will be used to pay off your existing mortgage, and you’ll start making payments on the new loan based on the agreed-upon terms.

When to Consider Refinancing

The decision to refinance should be based on several factors, including current interest rates, the remaining term of your mortgage, your financial situation and goals, and the costs associated with refinancing. If current interest rates are significantly lower than your existing rate, or if you’re looking to adjust the length of your mortgage term to build equity faster, refinancing could be a beneficial strategy.

Additionally, if you have accumulated high-interest debt, refinancing your mortgage to consolidate that debt into a single, lower-interest loan can provide financial relief and potentially save you money over time. Refinancing can also be a viable option if you need funds for a large purchase, such as home renovations or education expenses.

However, it’s important to consider the costs associated with refinancing, such as closing costs, appraisal fees, and potential prepayment penalties. Evaluating these costs against the potential savings and benefits of refinancing will help you determine if it’s the right choice for you.

Benefits of Mortgage Refinancing

Refinancing your mortgage can offer a range of benefits, tailored to your specific financial needs:

1. Saving on Interest Payments: Securing a lower interest rate through refinancing can lead to substantial savings over the life of your loan. Even a slight reduction in your interest rate can result in significant long-term savings, freeing up funds for other financial goals.

2. Shortening Your Mortgage Term: Refinancing to a shorter term can help you pay off your mortgage sooner and build equity in your home faster. This can provide financial security and open up opportunities for future investments or retirement planning.

3. Debt Consolidation: If you have accumulated high-interest debt, such as credit card debt or personal loans, refinancing your mortgage to consolidate that debt into a single, lower-interest loan can simplify your financial obligations and potentially save you money. By rolling your debt into your mortgage, you may benefit from a lower overall interest rate and a single monthly payment.

4. Leveraging Equity: Refinancing allows you to tap into the equity you’ve built in your home, providing you with access to funds for significant expenses, such as home improvements, education, or even starting a business. By using your home’s equity strategically, you can achieve your financial goals while potentially benefiting from tax advantages.

How to Get Started with Refinancing

If you’re considering refinancing your mortgage, start by assessing your current financial situation and researching current mortgage rates. Evaluate your goals and determine how refinancing can help you achieve them. Consulting with a mortgage professional can provide insights into how refinancing can fit into your overall financial plan. They can help you understand the potential savings and costs associated with refinancing, allowing you to make an informed decision.

To get started, gather the necessary documents, such as proof of income, tax returns, bank statements, and information about your current mortgage. Reach out to a trusted mortgage professional or broker who can guide you through the process, answer your questions, and provide personalized advice based on your unique circumstances.

Why Choose Us for Your Mortgage Refinance

Choosing us for your mortgage refinancing needs means you’ll benefit from our expertise, personalized advice, and access to competitive rates. We understand that every homeowner’s situation is unique, and we are committed to simplifying the refinancing process, ensuring you understand your options and how they align with your financial goals. Our team of experienced professionals will guide you through the entire process, from the initial consultation to the closing of your new loan.

When you choose us, you can expect:

Personalized Service: We take the time to understand your financial goals and tailor our recommendations to your specific needs.
Competitive Rates: We work with a network of lenders to provide you with access to competitive rates and terms.
Simplified Process: Our team will guide you through each step of the refinancing process, making it as smooth and stress-free as possible.
Expert Advice: Our mortgage professionals have extensive experience in the industry and will provide you with the expertise and guidance you need to make informed decisions.

Conclusion

Mortgage refinancing can be a powerful tool in achieving your financial goals, offering opportunities to save on interest, reduce your loan term, consolidate debt, or leverage your home’s equity. If you’re ready to explore how refinancing can benefit you, we’re here to help. Contact us today to learn more about your refinancing options and take the first step towards optimizing your financial future.

Frequently asked questions

What is mortgage refinancing?
Mortgage refinancing refers to the replacement of an existing mortgage with a new mortgage. You can use a refinance mortgage to obtain a higher mortgage amount, a different term, a lower mortgage rate, or to change borrowers on the mortgage.
What’s the difference between mortgage renewal and mortgage refinancing?
Mortgage refinancing can be done at any time during your mortgage, whereas a mortgage renewal is when your mortgage term is up for maturity and you need to pick a new mortgage.

Mortgage refinancing allows you to change the term, interest rate, and amount of your existing mortgage. People often refinance to take advantage of a lower interest rate or to take out more cash. A mortgage refinance usually involves a new mortgage application.

A mortgage renewal means you’re selecting a new mortgage. You can reset your interest rate, term, and amount. There is no penalty or cost at the time of renewal. If you are sticking to your existing lender, you do not need any credit application to renew your mortgage.
What are the benefits of mortgage refinancing?
1. Access cash using your home equity
Access up to 80% of your home value. You can use the funds to renovate your home, invest in another property, pay for education, take a vacation or support your business.

2. Lower interest rates
Refinancing into a lower interest rate can reduce the cost of borrowing. We negotiate with over 30 lenders to get the lowest refinance rates.

3. Consolidate debt
Consolidate high interest debts into your refinance mortgage to help lower your monthly payments, pay off debts sooner and improve your credit score.

Mortgages usually have lower rates compared to other credit products, such as personal lines of credit, credit cards, or commercial loans so refinancing your mortgage can be a great way to fund many of your life goals.
When should I refinance my mortgage?
You can refinance at any time. However, before you think about refinancing, you need to ensure you’re the right candidate. If you have less than a year to pay off your mortgage, you shouldn’t. If you’re not offered more favourable terms then opt-out.

Many people choose to refinance at the time of renewal. If you refinance before your current term matures, you may be charged a prepayment penalty. However, if the interest rate saving is greater than the penalty, it may still be worth refinancing even if your mortgage is not up for renewal yet.
How much can you refinance?
How much you can qualify for largely depends on your income and the value of your house, which determines your Loan-to-value (LTV). Estimate how much you can refinance by using our Refinance Calculator. Deciding if mortgage refinancing is right for you can get complicated. We are always happy to help by evaluating your situation and guiding you through the refinancing process.
What are the mortgage refinancing rates?
Refinance interest rates are similar to most conventional mortgage interest rates except that they are usually higher than default insurance mortgage rates. You can get the lowest mortgage refinance rates in under 2 minutes by talking with one of our experienced mortgage advisors. Click Get Started to begin your application or contact us directly.
How much does it cost to refinance?
The main costs for refinancing your mortgage include prepayment penalty/breakage, legal fees, title cost, and appraisal cost. You only need to pay a prepayment penalty if you refinance before your mortgage is up for renewal.

Your refinance may not require a lawyer depending on the complexity of the refinance. Legal costs are typically in the range of $1,000-$2,000. If you do not require a lawyer, there will likely be a “title cost”, which is to change or increase the “lien” the bank has registered on your property.

Second, refinancing requires an updated appraisal report on your property to ensure the value of your home is up-to-date. This is used for the lender to assess your Loan-to-Value. The appraisal report usually costs between $300 to $400 dollars.
Does refinancing impact your credit?
Usually refinancing doesn’t impact your credit. However, if you shop your mortgage rate with too many lenders, your credit file will get “multiple inquiries/hits” from different lenders, which will negatively impact your credit score. That’s why it’s beneficial to use an experienced mortgage broker, who will only check your credit once and then negotiate the best rate with multiple lenders on your behalf. Talk to one of our experienced mortgage advisors today for any questions you may have.

When to consider mortgage refinancing:

Home Renovation

Education

Debt Consolidation

Secure a Lower Rate

Emergency Expenses

Investing

What Our Customers are Saying…

Interesting

Alternative Lenders

Self Employed Mortgage