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As mortgage brokers in Edmonton, Alberta, we often have people come to us interested in refinancing their current mortgage. Many of our clients; however, don’t quite understand why they should look into refinancing their mortgage, despite all of the potential benefits that can come with it. There are many different reasons to refinance, and along with those reasons come many different refinancing options each with different benefits. Here at the Mortgage Tailors, our team is well versed in mortgage refinancing and have the knowledge to help you determine the best refinancing solution for your situation. Here are some tips or hints to help you determine when it is a good time to refinance, and what refinancing options are available to you.
Low interest rates: This is one of the main reasons people choose to refinance their mortgage. Interest rates are always fluctuating and may fall below the rate of your current mortgage. When interest rates are low for a consistent period of time our clients can take advantage of these low rates which may help lower their monthly payments as well as decrease the amount of interest paid over the lifetime of their mortgage.
Adjusting the Length of you Mortgage: Changing the length of your mortgage can also be a good way to free up some monthly income, or pay off your mortgage quicker depending on your financial situation and goals. By refinancing and changing your mortgage length you are also taking advantage of current interest rates, and either lowering or raising your monthly payments depending on whether you shorten or extend the term. Each of these options also has a direct effect on the amount of monthly interest paid as well as the amount of interest paid over the lifetime of the mortgage.
Variable or Fixed Rate Mortgage: Another reason to refinance your mortgage is to take advantage of switching to either a fixed or variable rate mortgage. A fixed rate mortgage means that you pay a set interest rate for your mortgage term, no matter if the general interest rate rises or falls. Fixed rate mortgages offer the mortgage holder peace of mind that their monthly payments will stay steady for the term of their mortgage. Variable rate mortgages have an adjustable rate that rises and falls with the Bank of Canada’s prime lending rate, but generally offers a better initial rate. In times where there is a long consistent period of low interest rates with a good future outlook, it is good to take advantage of what a variable rate can offer.
Free up Equity: Freeing up some of the equity in your home is another reason one may choose to refinance their mortgage. Whether it be to consolidate or pay off other debts, to put money towards home improvements and renovations, or to withdraw cash for any reason, freeing up equity in your home allows you fast access to cash.
There are many different reasons, and ways, to refinance; these are just a few options available to you depending on your financial situation. If you think refinancing is the right step for you feel free to call us at (780) 244-0505 and the team at the Mortgage Tailors can help you. You can also make use of our handy refinance calculator https://mortgagetailors.com/refinance-calculator/ to determine what refinancing can do for you. Or head over to our services page https://mortgagetailors.com/refinance/ to learn more about what refinancing with the team at the Mortgage Tailors can do for you.