Refinance

Why refinance?  There are at least 4 reasons to refinance a mortgage.

1. To get a Lower Mortgage Rate.

Most home owners are in a mortgage term of 5 years and many of these homeowners are now taking advantage of historic low interest rates and refinancing.   In many cases it is worth paying or absorbing the penalty in a refinance and switching to a lower rate.   If your current rate is close to 4% or above it may be worth considering.

How does one know if it is worth while?  The numbers give you the answer.   There is no emotion involved in this decision.  Calculations will determine if it makes sense by comparing how much principal and interest you will pay to the end of your current at your current rate to the how much principal and interest you will pay at the new rate, and also what the outstanding mortgage will be at both rates.  The penalty is also taken into consideration on the new rate.   If you pay less interest and more principal and owe less at the end of the term then the answer is YES – Refinance.

2. Consolidate Higher Interest Debt

Many home owners have incurred high interest debt due to unforeseen circumstances.  This could include excess credit cards debt, car loans, and personal loans.  A refinance could eliminate this debt and reduce the total out of pocket  monthly expenses.

3. Equity take out for a Major Purchase or Investment

Maybe it is time to invest in a rental property, put the kids through university, start a business or purchase a vacation home.   A refinance can free up capital to make these happen.

4. Address Family Matters

A change of marital status may result in one spouse wanting to buy the other spouse out and settle a divorce or separation.  This situation is different than a traditional re-finance in the fact that it can be done as a high ratio mortgage with the loan to value extending up to 95%.  This may be helpful is allowing greater payouts and debt consolidation to help facilitate the separation.

Call anytime at 604.818.9262 to determine if a refinance may fit your needs.