Top Reasons Montrealers refinance their Mortgage

There are a number of circumstances that lead people to refinance the mortgages on their homes. According to resident Montrealers, the following are the top reasons influencing this decision.

 

Take advantage of lower available Mortgage Rates One of the main reasons why you would want to refinance your home would be because the current mortgage rate being offered at most banks is lower than the rate you are paying on your own mortgage. For example if you’ve had your mortgage for a number of years, you may be locked in at paying somewhere around 5.5%, whereas now the current rates are running at less than 3% on a closed term. In many cases it could be to your advantage to break your mortgage and pay the penalty, in order to refinance your home at a new lower rate of interest. You should however rely on a professional mortgage specialist who can look at all the facts and work through all of the calculations to ensure that this is really in your favor. We always put the needs of our clients first and will always provide you with an impartial opinion that outlines what is best for you, the homeowner.

 

Lower Monthly Mortgage Payments Life can be expensive, and many unforeseen circumstances and financial obligations can seem to come out of left nowhere, causing people to go searching for ways to lessen their monthly payment obligations. Lowering your interest rate by even less than 1% can still considerably lower the monthly payment on your mortgage. The two main ways that this is usually accomplished would either be to (1) refinance your home at a lower interest rate which in most cases will reduce your monthly payment, or (2) changeup the amortization period, or the length of time until your mortgage loan is set to run. The second option is not the most financially sound in a perfect scenario, however if you have major budgetary constraints that you’re dealing with, it can definitely help you manage things better by lowering the monthly payments and stretching the loan over a longer period of time. It’s good to know however that if and when your situation improves, you can most likely revert back to a shorter overall term, which will increase your monthly payments and help you to pay off the mortgage quicker down the road.

 

Money to pay for other expenses Large expenses are simply a part of life, and often running a family household has most of us stretched so tightly that often people simply don’t have enough money saved up to pay for some very important items. Examples would include paying for a child’s university education, having that long needed renovation to the house, or in some cases there is a medical emergency that healthcare just doesn’t cover adequately. Whatever the reason, the solution may lie in refinancing your mortgage in order to come up with the necessary funds to pay for these other expenses. Now there can be fees involved that you may not be aware of, but we are prepared to walk you through the advantages and potential disadvantages that come along with this option, so that we help you come up with a solution that makes sense in relation to your needs and circumstances.

 

Debt Consolidation Smaller loans and multiple credit cards can be enticing at times in order to help get things you want in the short term. In the moment, a person may not be overly concerned with a higher than normal interest rate, because at the time they were convinced they would have no problems paying it off promptly. Good people however, often find themselves in bad situations simply because they’ve gotten in over their heads, and are stuck stretching out a number of smaller debts over a longer period than they planned and at very costly interest rates. Fortunately if you have some equity in your home, you can potentially roll other monthly liabilities into your mortgage. By doing this you can pay off and get rid of these high interest debts and consolidate everything into a more manageable, lower interest solution, that only has you making one payment per month.

 

Obtain funds for an investment Making your money work for you can be advantageous, and often a great way to get ahead is to utilize the equity from one investment into another. Depending on your situation, it could be possible that there is sufficient equity in your current home that would enable you to purchase another property. Some people seek to use this money in order to get that summer cottage they’ve always wanted, however if you’re refinancing your home to reinvest in something else, then you should put considerable thought into making a wise decision.