If you’re looking to save money, you may want to learn all about mortgage refinancing. This process involves getting a new mortgage with better terms and paying off your existing one. Just like the mortgage you took out to buy your home, refinancing allows you to choose a lower interest rate and you may even choose to have longer amortization.
Benefits of refinancing your mortgage
One of the biggest benefits of mortgage refinancing is that you can reduce your mortgage interest rate. This is especially important if you have seen the average interest rate in the market is 0.5% lower than yours. If you can save 0.5% lower interest in your mortgage, you can save thousands of dollars over the life of the mortgage (amount varies depending on the principal loan amount).
Refinancing at a lower rate should be easy if you have been paying your mortgage payments on time, and you have a stable verifiable income. You could have incurred additional debts since the time when you started the mortgage contract, so these new debts will be calculated to the debt-to-income ratio when you’re qualifying for the new mortgage.
How to qualify for mortgage refinancing
You’ll have to complete a mortgage refinance application and provide supporting documentation. Depending on the lender and overall market demand, the refinancing process can take several days or weeks. The first step in mortgage shopping is to shop around for the best rates and terms. You can work with a certified mortgage broker to get you the best rate without having to shop on your own.
When working with a certified mortgage broker, you want to look at client satisfaction scores. Once you find the right mortgage broker for you, you can start sending your application and supporting documents to begin the process. Once your mortgage broker has found a lender, you’ll be given an option to lock in your interest rate.
How to compare mortgage refinance lenders
The next step is to compare different mortgage lenders who offer the best mortgage refinancing options. Remember, your current lender often wants to retain your business while other lenders want to earn your business. Whichever lender you are going with, you can often ask them to waive your application or origination fees. If your paperwork is in order, your lender will be more likely to agree to waive your application and origination fees.
How to compare mortgage refinance offers
The best way is to compare to look at the monthly payment amount and compare it before and after the refinance. You want to make sure your interest rate is at least 0.5% lower and your mortgage payment amount is lower in the new mortgage.
Last but not least, you can use an online calculator to figure out your savings from lower interest rates. The calculator will show you the savings that you’ll see from the lower rates. A good mortgage broker will find you a refinancing deal that will make your current financial situation better.
Should you refinance your home?
As a homeowner, you may consider refinancing your mortgage because you are paying a higher interest rate than you could obtain today. Or maybe you want to obtain a lower monthly payment by extending the term of your loan. It may seem like a no-brainer to refinance, and it is often a smart financial decision to do so if you do it right. Before refinancing, you should consider your current financial situation and the purpose of refinancing your home.
Refinancing your mortgage is a popular option for homeowners who have an existing mortgage (or more than one) and are thinking about taking out a loan to pay off one of them, or to pay off all of them. This is consolidating your multiple loans.
Frequently asked questions on mortgage refinancing
Do you need a lawyer to refinance your mortgage in Canada?
You do need to work with a real estate lawyer when you refinance your mortgage. Many lenders would consider reimbursing the legal fees, depending on how competitive they are to retain/earn your mortgage loan in their portfolio.
It is a good idea to work with an established real estate lawyer who has experience working with your mortgage lender. Ask your mortgage broker for a recommendation.
How long does it take to complete a refinance?
A mortgage refinance with the same lender can complete as fast as two weeks’ time because they have all the information they needed to qualify your mortgage. The bulk of the processing time is the property appraisal and legal processing at the real estate lawyer’s office.
Refinancing a mortgage with a new lender typically takes 14 to 28 days to complete, which are depending on other variables as well. You can speed up the process by preparing all the documents up front when submitting your application. Your mortgage broker will help you make sure all the required documents are submitted together with the application and reduce the delay due to back-and-forth requests for more information.
Work with Matrix Mortgage Global
Matrix Mortgage Global (Lic. #11108) has access to over 100 different lenders. You have access to a wide range of lending partners who are ready to offer you various mortgage solutions, including mortgage renewals, refinancing, second mortgages, home equity loans, bridge loans, and other specialized mortgage products.
Jermaine Hinds, Mortgage Broker Offers Personalized Solutions for Home Buyers and Homeowners
Jermaine Hinds, Mortgage Broker believes in delivering results to clients with their best rate and solutions possible. He has built his reputation around helping people and getting them mortgage financing that fits their situations for the long term. The collective knowledge and experience from Jermaine and his team will help you achieve generational wealth through real estate.
If you are interested to stay informed and broadening your knowledge on Canadian mortgages, consider subscribing to his YouTube Channel for a weekly update.
Matrix Mortgage Global - Jermaine Hinds | Mortgage Broker
100 Consilium Pl Suite 200, Scarborough, ON M1H 3E3, Canada
