Many Canadians have suffered financial, emotional, and physical stress due to COVID-19. A longer mortgage term may be the best course of action if your family’s financial situation has become precarious. Homeowners who live in a low-interest-rate environment can refinance their mortgages. Refinancing your mortgage can help you maintain stability in a world where even basic securities can appear to be unreliable.
Refinancing a mortgage can result in significant savings on a homeowner’s monthly payment. Contact your lender directly and submit the required documents to apply for a mortgage refinance on your home. Circle mortgage has been helping customers refinance mortgages for over a decade. Find out more about refinancing a mortgage and how it works.
What are the benefits of mortgage refinancing?
Mortgage refinancing is terminating your current loan and starting over with a new one. When you refinance your mortgage, you are essentially terminating your existing mortgage agreement and applying for a new mortgage agreement. Mortgages with fixed interest rates are the most common type of mortgage. Mortgages with variable interest rates are also available, depending on the market.
Refinancing a mortgage in Canada is a simple process. Refinancing your mortgage can be used to pay off high-interest debt and pay down your mortgage. It is possible to adjust the amortization period to suit a family’s financial situation. Refinancing your mortgage can, without a doubt, save you thousands of dollars in interest.
Things to consider before refinancing your mortgage
When refinancing a mortgage, there are many things to consider, including different interest rates, amortization periods, penalties, and switching to a different lender. If you want to refinance your mortgage, you should consult with a mortgage professional before applying. Here are a few other things to consider.
- A mortgage professional can assist you in assembling all of the necessary documentation for your loan application. Obtain approval and review the proposed mortgage agreement with your attorney.
- A high credit score is critical to get the best rates possible when shopping for a mortgage. A low credit score can cause lenders to charge you a premium for refinancing your mortgage. Refinancing your home entails applying for a new mortgage, and you’ll have to demonstrate that you can afford your monthly mortgage payments.
- Mortgages for self-employed people are no longer available from the Canadian Mortgage and Housing Corporation. Those with damaged credit who lost their jobs or declared bankruptcy are not eligible for the best rates.
- If you refinance your mortgage too soon, you may be subject to fees and penalties. You will be penalized with three months’ interest or the interest rate differential penalty.
- When refinancing your mortgage, shop around for the best possible rate. A private broker can provide access to hundreds of different lending institutions. Consult your current lender and a private mortgage refinance broker to determine whether you can refinance your mortgage.
- Low mortgage rates allow you to access the equity in your home for debt consolidation and other purposes.
Mortgage refinancing can be a worthwhile investment, even when penalties are incurred. Consult with your mortgage broker to compare mortgage rates and terms.