Mortgage Refinancing: Options Available
Mortgage refinancing means renegotiating the current mortgage loan agreement. This gives you the liberty to access the equity and reduce the cost of borrowing by leveraging at lower interest rates. When you refinance your mortgage it increases the mortgage loan for financing larger expenses. You can use the loan for renovation or purchasing a newer house. There are moments in life when you consider refinancing your mortgage. That is the moment when you wonder what are mortgage refinancing options in Toronto ? It can be a daunting question. We are here to make it easier for you. Following are some of the refinancing options you could consider.
Early Closing of the current mortgage
If you wish, you can pay off your current mortgage earlier than anticipated. Along with that, the other debts that you have against the property. Once that has been done, you can take a new mortgage at a more suitable rate and term.
Adding a home equity line of credit HELOC
HELOC lets you borrow about 65% against the equity of the house. This is done through a home-equity line of credit. When you choose this refinancing option, you can use what you need. As you are not making use of the whole amount, you only have to pay interest on the amount that you have borrowed. You can easily borrow and pay back from the HELOC. You could also get a HELOC along with the existing mortgage. This can be done without paying any prepayment penalties or breaking the mortgage.
Blend and extend
Some lenders will let you renegotiate the interest rates before the mortgage term ends. This is also referred to as an early renewal. It allows you to blend the current rate with the existing rates. This lowers the number because of which you can enjoy a lower interest rate when there is an extension of your existing mortgage term. This refinancing option also lets you save on prepayment fees.
Adjusting the amortization period
You can save thousands of dollars by shortening the amortization period. This option should only be used when your financial situation allows you to. You could also consider extending the amortization period in the favor of reducing the monthly payouts.
Reach out to the experts
Deciding which mortgage refinancing option would be the best for you can be quite a task. Each person has their own needs that they aim to reach through this refinancing. Hence, the option should always be chosen according to the requirement. It is best to reach out to a Certified Mortgage Broker. A consultation with them will help you gain more clarity. Based on your situation, they will educate you about the various refinancing options available for you and would be best suited. This will help you to make a more informed decision. Once you have decided, they will help you to get the best possible deal. It can be daunting considering mortgage refinancing. Having an expert by your side can make it easier.