Because we are the Toronto mortgage broker team with a good reputation, homeowners come to us with questions about refinancing. We always tell them that this is a powerful way to renegotiate mortgage terms and or unlock extra cash.
Your Toronto Mortgage Broker and Refinancing
Simply put, mortgage refinancing is the process of replacing the mortgage you have with the newer one. At any time during the amortization period, you can refinance with a Toronto mortgage broker.
However, you might need to pay a penalty.
Refinancing your mortgage is a good idea if any of these scenarios apply to your finances:
- It’s in your best interest to change the monthly structure of your payments.
- It’s time to think about consolidating debts into one payment.
- You’re looking at increasing the value of your home with renovations or repairs.
- It’s possible to get a lower interest rate with the refinance to save money.
It’s possible to convert the type of mortgage you have from a variable to a fixed rate or vice versa. If you choose a variable-rate mortgage over a fixed-rate one, you can save some money over time but that situation can backfire. When interest rates start going up, a fixed-rate mortgage is the better plan for stability.
Enough Equity?
One of the other important factors is determining if you have enough equity to refinance. Equity is the difference between the amount that you owe on the home and the current value. Most likely, a lending institution will order a home appraisal to determine the worth.
As your Toronto mortgage broker, we like to suggest that homeowners are present during the appraisal so they can ask any questions. Make sure to have documentation for any upgrades and renovations on hand. Finally, tidy up and make sure there’s no clutter.
