With mortgage rates near historic lows, now is the perfect time to refinance. Refinancing your mortgage with lower interest rates will help you save money and improve your financial situation.
Best Reasons to Refinance a Mortgage
- Take Advantage of Low Interest Rates: One of the best reasons to refinance a mortgage is to take advantage of low interest rates. While you might incur a penalty for breaking your mortgage to refinance, it might be worth it in the long run.
- Consolidate Debt: Refinancing to consolidate debt makes a lot of sense, especially if you have high interest credit card balances and loans. The interest you pay when refinancing is much, much lower than what you pay on a credit card, car loan, or even line of credit; your monthly interest charges will be lower; and you will have all your debt in one place.
- Access Home Equity: You can access up to 80% of your home ‘s appraised value when you refinance. Some of the most popular reasons to refinance and access home liquidity are home renovations, investments, and tuition.
Consolidate Your Debt Through Refinancing
The number one reason for refinancing in Canada is to consolidate debt. That said, there are pros and cons to refinancing your mortgage to pay off your debt so you need to carefully weigh out the options before deciding if this is the direction you want to go.
Refinancing at a lower interest rate leaves you with a lower mortgage payment every month. Electing to extend the term of your mortgage can also help you save money by lowering payments. In both instances, the additional monthly savings can be used to pay down your debt.
Refinancing Your Mortgage with Bad Credit History
It can be difficult to refinance your mortgage if you have bad credit. A bad credit mortgage is specifically designed to help people with bad credit refinance to pay off debts or buy a home. The terms of refinancing with bad credit often means having a longer amortization period and higher interest rates.
It’s important to keep in mind that your credit score is not static, changing with your financial situation. Your credit score will improve if you continue to pay your mortgage and bills on time and pay down your debt.
Canadalend.com, the Best Mortgage Professionals
Refinancing is almost always a good financial decision, especially if it helps you save a substantial amount of money in the long-run. However, there are many factors to take into consideration if you’re thinking of refinancing. At Canadalend.com, we will explain the process to you fully so that you are aware if the time is right for you.
If you are interested in refinancing your home mortgage or even want to know what your options are, contact Canadalend.com or apply online and a mortgage specialist will help set up an appointment at your earliest convenience.