Mortgage Refinancing in Orillia
Many people are unsure as to why they should refinance their mortgage, and what that even means. Refinancing your mortgage means you will break your current mortgage and begin a new one automatically, either through your existing lender or a new one. There are a few reasons you may want to refinance, you may want to access current lower rates, you may want to gain liquidity via equity in your home, or even to simply consolidate higher-interest debt. Before you refinance though, check your current agreement and do your research, depending on the terms of your current mortgage may include prepayment penalties, and those may outweigh the benefits.
Top Reasons To Refinance Your Mortgage
Lower rates are not the only reason you may want to refinance your mortgage. Take a look at some of these options and see if one fits your needs.
- Lower Rates – Refinancing to get lower interest rates can save you thousands of dollars over the term of the mortgage, however, you may have a payoff or prepayment penalties that would offset that savings benefit.
- Accessing Home Equity – When you refinance your mortgage, you may be able to leverage the equity in your home, and access nearly 80% of your home’s appraised value minus any present debt.
- Debt Consolidation – If you have a large enough amount of equity you may be able to use that value to borrow against and get rid of your high-interest debt, paying it off in favor of the lower interest being paid on the mortgage.
How To Refinance Your Mortgage
There are three ways to refinance your mortgage. Breaking your contract early, taking out a line of credit, and blending your current mortgage and your new one.
- Break Your Existing Contract Early – You would consider this option if you wanted to begin either a line of credit or lower rates.
- Add A Home Equity Line Of Credit – This performs like nearly any other line of credit, you can use it for renovations, debt consolidation, or anything else you like.
- Blending And Extending Your Current Mortgage – If you stay with your existing lender, they may offer a new “blended” rate that adjusts your current rate and applies that rate to any more money borrowed.
Where Can I Find Out More About Refinancing
To get all the best information with updated rates and possibilities, you should reach out to a local mortgage broker, like the licensed brokers at Dunlop Mortgage. We will be your expert resource, and answer any questions you may have.