Refinancing Your Mortgage

You’ve paid down your mortgage to a balance you’re comfortable with. Maybe it’s time to just bite the bullet and finance that kitchen project, or maybe you’re tired of paying all the little bills that crept up on you…the credit line balance, car loan, or all those credit cards you somehow managed to be ‘preapproved’ for.

Rolling outside debt into your mortgage can be an excellent strategy, saving you money in the long run. I can help provide some short term relief, and ultimately a sensible long-term financial plan.

Sometimes interest rates alone are a large factor in this decision. You know that mortgage rates are lower than loan or credit card rates, so why not consider the money saving factor? Or, if you fall into the ‘peace of mind’ category, think about eradicating all those bills every month that you have to remember to pay on time. Sometimes minimum monthly interest payments can chip away at your monthly budget without you even noticing. If you pay $250 in monthly interest with a $1000 net monthly budget, that’s 25% of your income being effectively wasted!

Keep in mind that a debt consolidation strategy needs to be just that – a strategy.Keep in mind that a debt consolidation strategy needs to be just that – a strategy. It should not be used as a way to justify continual consumer spending. Eating away at your equity to buy ‘things’ is not a financial plan I endorse!

When carefully planned out, we can add the debt back to your mortgage, and as long as your payments are increased accordingly, effectively pay it all off at the lower rate. If you are funding home improvements with your refinance, and it makes sense to add the debt to the life of the mortgage, then the repayment strategy does not have to be as stringent.

Keep a few things in mind when considering a refinance:

You will be allowed to borrow against the value of your home but onlyup to a certain percentage, currently at 80%. Also, if you own less than 20% of your home this means you will have to factor in Mortgage Default Insurance, which could be costly enough to affect your decision. Also be aware that if you go above your initial mortgage amount, legal fees will be charged at your expense.

If you’re considering refinancing, let’s talk about your options and see if it’s the right choice for you.

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Did you know:

45% of first time buyers and 33% of repeat buyers use a mortgage broker for their mortgage needs.

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