4 Good Reasons to Think About Refinancing Your Residential Mortgage

By Michael Adams

How happy are you with your mortgage? Even if it’s been some time since you gave it a second thought, there are compelling reasons to compare the current contract with what you could lock in by refinancing it.

This is true even if you’re not in the best place financially. There are a number of providers who can help with a Toronto bad credit mortgage deal that could be right for you. If any of the following would help strengthen your position, it’s worth the time and effort needed to make the comparison.

Lock In a Better Interest Rate

Take a look at the type of interest rate you could get if you refinanced today. Does it compare favorably with the fixed rate found in your current mortgage agreement? For those who have an adjustable rate mortgage, what would a fixed rate do in terms of reducing the amount of interest you’ll pay over the life of the loan?

Assuming that any costs or fees associated with settling the old mortgage and securing a new one will be offset by the difference, refinancing could turn out to be a lucrative move on your part. You won’t know for sure until you look at the rates and then do some projections.

Restructure Your Existing Debt

You have quite a bit of equity in the home right now. There’s also several debts that you’re in the process of paying off. What if you could refinance the mortgage and tap into that equity to pay off those other debts? Assuming the interest rates and terms included in the refinanced mortgage are lower than what you currently have with those other debts, you stand to save a tidy sum.

It doesn’t hurt that debts paid in full can help with your credit score. Along with the money that you save, boosting the score and adding more positive comments to your credit reports will help you down the road.

Own the Home Outright Sooner Rather Than Later

Have you considered that refinancing could pave the way for owning the home outright sooner rather than later? What if you came across a deal that would allow you to retire the Mississauga second mortgage as well as the primary one and shorten the duration by five years? With a good interest rate and payments that are close to what you already pay, that could happen.

Make It Easier to Set Aside Funds for Savings and Investments

The right type of refinancing definitely frees up more of your monthly income. What will you do with it? A smart move is to place some of the excess funds in a savings account. Another portion can be set aside to purchase investments with relatively low volatility and steady returns. The last portion can go toward purchasing investments that are more volatile but have the potential to generate greater returns. Even if the latter doesn’t always pan out, the first two actions help to improve your financial position.

Look around and see what sort of refinancing deal you could receive. Consider how refinancing would benefit you in the short term as well as the long term. If you see real advantages to this action, submit an application today. Ten years from now, you’ll be glad that you did.