The process of mortgage refinancing is done mostly to get access to equity in one’s property. You may have many reasons to refinance your existing mortgage. Most of them are:
- Home renovations
- To consolidate non-mortgage debt
- Borrowing to invest in a second property
- Rearranging finances, thus making the mortgage interest tax deductible
- A drop in the mortgage rates results in you paying the higher interest. Time to renegotiate your mortgage.
But for a Kelowna mortgage renewal there are many factors that you need to consider. First of all, you need to be sure you have the right reasons for refinancing.
The smart reasons to refinance your mortgage
Take advantage of low-interest rates. You need to stay strong and don’t let the penalties deter you. You need to know the numbers first. You can break your contract for a lower interest rate. This way you can save money over a longer period of time depending on the penalty. If you have a variable rate mortgage, the penalty consists of three months interest. If you have a fixed rate mortgage, then you will have to pay the greater between three months interest and interest rate differential penalty (a.k.a. IRD).
Access equity in your home (cash). By refinancing, you can receive up to 80% of your property’s value. This is extra money good for investment opportunities, your children’s education or home renovations. You have several ways to access these funds, including breaking your loan or taking on a property equity line of credit. A Kelowna construction mortgage is one option for lending.
Consolidating the debt. If your equity levels are sufficient, you can payout through a refinance, high-interest debt. I.e. If you have a number of debts, like a car loan, line of credit or bills, you can consolidate all of the debt with a variety of refinancing options.
Methods of refinancing
Breaking your contract early. Considering to break your mortgage early has become something normal for those who want to obtain a lower interest rate or access a sum of money. You can eliminate an existing mortgage and take on a new one with any other lender.
Add a home equity line of credit. This gives you access to equity in your home. You can access this home equity line of credit with your existing lender and a small subset of some other lenders.
Blend and extend your mortgage. A professional mortgage broker in Kelowna can offer for your current mortgage a ‘blended rate’. This is a ‘blend’ of your current mortgage rate and additional money you borrow at the current market rates. Blended rates are usually higher than most competitive mortgage rates. You need to compare the blended rate against the savings if you want to break your mortgage
The best solution in Kelowna
Rampone-Marsh Mortgages are specialized in home refinancing in Kelowna and the BC area. We are dedicated to meeting each of your needs and desires, and connecting with you in a friendly and professional manner. Our team of experts from Rampone-Marsh Mortgages will help you and give the advice you need to fully understand why you need a home refinance and what are the steps you can take for a better life.