Points To Consider Before Refinancing Your Home In Calgary

As a homeowner in Calgary, refinancing your home can bring you a number of benefits

, based on your specific status. Refinancing involves moving from your current loan to a new and better loan, usually with a lower interest rate. As a first step, decide why you want to refinance so that your mortgage agent can help you choose the right options.

There can be many reasons for considering refinancing your home:

To benefit from lower mortgage rates resulting in substantial savings and improve savings and cash flow

To convert a fixed rate mortgage to a variable rate mortgage or vice versa to take advantage of lower rates

To take out the equity in your home

Increase the amortization period to reduce monthly payment

Refinancing your home in Calgary can also benefit you by letting you leverage the equity in your home to make new investments with the added benefit of tax deductible mortgage payments

Consolidate debts or multiple mortgages into a single mortgage

To clear other debts such as credit card from the proceeds of the new mortgage while improving your credit score. The interest rate of a secured mortgage is far lower than that of an unsecured loan. In the refinancing process, the existing mortgage is paid out in favor of a better rate, consolidating other high interest debts into the new mortgage.

To finance major home renovations

To specifically create savings for the future

The decision to refinance often depends on what it will cost to switch from your current loan to the new one. Your mortgage broker in Calgary can help you with this important decision by weighing all the pros and cons, assessing the status of your present mortgage, taking into account your income and debts so that the right refinancing solution can be chosen.

The main thing is the early payment penalty involved, or the cost of clearing the current loan, and calculating whether the benefits of refinancing are worth it. Preferably, mortgages must be reviewed on an annual basis to make sure you have the best rates. Refinancing into an even lower rate can be beneficial, even if it means breaking the existing mortgage arrangement and paying the related penalties.

To make an informed decision, get in touch with your mortgage agent who can shop with several lenders to find out the prevailing rates and costs related to refinancing your home. This will help assess the new monthly payments you must make and the savings you will benefit from. How much you save will depend on the total cost of refinancing, its impact on your taxes and whether you intend selling your home in the immediate future. Lower interest rates mean lower deductions on your income tax, which means higher tax payments, thereby reducing the savings you expect from a low interest mortgage.

With the help of your mortgage broker, shop around and ensure that you get a commitment to lock in the low interest rate from the lender while you review the various financial aspects of refinancing and choose the one that is ideal for you.

by: Amanda

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