We understand that life happens and that financial needs change. You may want to pay off your high-interest debt, finance your children’s post-secondary education, care for an elderly parent, or add that new kitchen you’ve been dreaming about. We will tailor a program to meet your needs and make life more manageable.
First, it’s important to understand the difference between renew and refinance. Renew means that your current mortgage term is about to end and that you need a new mortgage term for the balance of the mortgage, with no increase in amount. Refinance means that you are looking for an increase in the amount of your current mortgage. It may be at the time of renewal or it may be at some point during your current mortgage term. If refinancing comes during your current mortgage term, then an interest penalty will apply to “break” your current mortgage term and start a new mortgage.
At the time of renewal, your current lender will send you a renewal offer for you to consider. It is common for borrowers to accept the lender’s offer because it is hassle free. People have busy lives and do not want the added stress of re-qualifying for a new mortgage with a different lender. But keep in mind that renewal interest rates are not typically the lender’s best rate. It is the mortgage broker’s job to find you the best interest rate and lender for you. Many lenders have “switch” or “transfer” programs that offer incentives and make it easier for you to switch lenders. These incentives may include better interest rates, payment of legal fees, payment of appraisals, and more. Yes, it will mean that you need to provide all documentation again for the new lender, but this short-term pain can give you long-term gains. Talk to us about your upcoming renewal. We will tell you, honestly, if you should take the offer from your current lender or if it is worth looking at other lenders for a better deal.
Refinancing is an excellent solution for many situations. Are you house rich, but life poor? The average Canadian five-year mortgage, is broken after 3.5 years due to unforeseen or unplanned circumstances. Again, life happens.
The average Canadian household credit card debt balance is more than $21,000. Compare credit card interest rates, typically ranging from 18 to 24 per cent to that of current mortgage refinancing rates, ranging from 2.94 to 4.99 per cent. You can use your refinanced mortgage to pay off your high-interest debt and improve your cash flow.
Post-secondary education is expensive. For example, the average annual cost of sending your son or daughter to university is $17,000, or $68,000 for a four-year program. Refinancing your current mortgage can be a low-cost way to pay for post-secondary school.
The cost of senior care in an assisted-living facility is an expense that many seniors cannot afford. For example, using a monthly cost of $4,500, a five-year stay in an assisted-living facility is a total of $270,000. Mortgage refinancing of either the parent’s property or of one of the children’s properties can be a viable solution. Alternatively, a reverse mortgage is a good solution that is primarily designed to keep the parents in their current home and to pay for in-home care.
The best way to add value to your house is to upgrade your kitchen and bathrooms. Refinancing your mortgage to do a renovation is a low-cost solution to realize your dreams. A typical renovation ranges from $50,000 to $200,000. It takes a long time to save this kind of money. Refinancing can allow you to do the renovations to enjoy your home now.
These are just a few of the common reasons to refinance your mortgage. Thanks to our access to more than 50 lending institutions, including major banks, credit unions, trusts, and other significant national and regional lenders, we will help you select the option that is most beneficial for you.
To get the refinancing assistance that you need, start a conversation with Sean Stewart today. Your local Ajax mortgage lender.