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What is Mortgage Refinancing

Mortgage refinancing is the same process you encountered when closing on your first mortgage. It also requires application, credit check, title search, new survey and appraisal and inspection fees. The privilege to refinance your mortgage at a much lower rate of interest is sure to get your attention. Nevertheless, it may not always be the right decision. You should know when the right time to refinance your mortgage is.

Before you decide to refinance your mortgage, you have to determine what you want to accomplish. Keep in mind that a refinance does not pay off the debt but restructures it, usually at a lower interest rate and a different loan term than your present mortgage. The most common goal in refinancing is to reduce the interest costs. However, some homeowners also appreciate the capacity to extend the loan back to thirty years, reducing the monthly dues.
Another reason why you should refinance is debt consolidation. If you have a first mortgage and home equity mortgage, combining them into one fixed-rate mortgage will help level out the payment over the term of the loan. Keep in mind that it pays to refinance if you are able to get a rate of interest that is at least two percent points lower than what you are paying currently. Nonetheless, each situation differs in a case-to-case basis. There are some lenders offering reduced fees or no points. It is necessary to determine how much you can lower your monthly payment, how long do you plan to stay in the home after you refinance and how much you are going to pay for refinancing expenses.

Furthermore, you also have to find out how much you have paid initially for your home. This can help you figure out where you start saving money and break even. The advantages of refinancing a mortgage for numerous borrowers is it helps lower payments on a monthly basis and makes cash ready for investing or spending. When considering refinancing, make sure that you shop around to find the right lender to choose from. Keep in mind that advertised rates of some lenders are not always reliable. Experts believe that when some mortgage refinancing companies publish their rates, it is likely that only around ten percent of applicants will avail from it. The low rates displayed are used to lure people and not wise to jump on the refinancing bandwagon right away.

Make sure that you know the kind of loan you need. It is important to disclose details to the loan officer so you will be given the best rates possible. Discuss how long you will be able to pay off your loan and the amount you exactly need. If you can inform the loan officer immediately, about any information that reveals whether you meet the requirements or not, the sooner you will find out if you will b exempted from paying the other additional fees and costs. Do not forget to weight your options well and determine the right choice for you.


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Get the piece of mind you deserve with a low rate mortgage from the Toronto Mortgage Group. Call 416 230 4433 for a new mortgage or a refinance, we can help!

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