Mortgage Refinancing Alberta: Why And When To Do It?

Mortgage refinancing means taking a new mortgage loan to break the current one and pay for the upgrades of the house. One can take this new loan from their existing lender or a new one. Refinancing a mortgage holds the most significant benefit of paying lower interest rates. Still, it should also be kept in mind that repaying the entire loan before maturity can incur a hefty pre-payment penalty. This one factor makes mortgage refinancing risky.

Therefore, an Advice on Mortgage Refinancing Alberta is to do a good amount of research and read the terms of the current mortgage loan before refinancing it.

Why Choose to Refinance a Mortgage?

Here are three reasons to refinance the mortgage.

Lower Interest Rates

One of the most common and compelling reasons to refinance one's mortgage is to benefit from lower interest rates. Mortgage refinancing for a lower interest rate saves a lot of money and duration spent paying off the loan. It reduces one's liabilities.

Consolidate Debt Using Refinancing

If the house has enough equity, then mortgage refinancing can be used along with the house equity to consolidate and pay off high-interest loans. For instance, if one has outstanding loans like credit card bills, line of credit, or a car loan, using refinancing options available, these loans can be consolidated and paid off.

Access the Property

The value of the house may have increased over time. So if this happens, refinancing the mortgage can be a clever move. It will increase the house's equity, and one can also benefit from a lower interest rate.

When to Opt for Mortgage Refinancing?

To know if one is ready to choose to refinance, the following question can be asked:

What is the Reason for Refinancing?

Ask what the reason behind refinancing is. Is it to assess the home equity, upgrade the property, get better interest rates, or consolidate debts? Analyze if the reason is enough to incur a penalty and other additional fees. Know that refinancing reduces the liability but is not an escape route.

Is Refinancing Suitable?

As mentioned above, refinancing can be done for quite a few reasons, so one should ask themselves if that is the best option they got. Check out different loan products available, measure their pros and cons, and conclude if Mortgage Refinancing Alberta is the best-suited alternative.

Is One Capable of Affording the Repayments?

A refinanced mortgage leads to a new repayment amount and a new interest rate. Assess if one is capable of repaying the amount. Carefully calculate how much one can afford to repay on a refinanced mortgage.

First & Second Mortgages is a specialist in mortgage financing. We lend money to people fast, based on the equity you have in your home or another property. We want you to find the best way to get a second mortgage Canada, refinance your mortgage.