Refinancing a mortgage has many benefits in a low mortgage rate environment. As today’s credit cards, credit lines and other loans can easily be over 14%, combining these into one low rate mortgage can
save thousands of dollars. A typical mortgage refinance will combine your existing mortgage and these debts into a new mortgage at rates around 2.99% currently. The maximum loan to value, meaning the maximum mortgage based on the appraised or market value of the home, is currently at 80% with all banks and mortgage lenders. The typical mortgage refinance in Toronto will cost about $1000 to $1500 in legal fees to arrange the mortgage as a lawyer has to discharge the old mortgage , meaning pay it off and remove the registration from the land title office and setup the new mortgage registration. The lawyer also has to gather all debt statements from the borrower to pay them off as agreed to with the new lender or bank.
Consider that doing a mortgage refinance will eliminate all those debts you have at 10% – 22% , the savings from having all of those debts in a mortgage are quite impressive. The monthly payments for all of your debts combined are now in one easy to make mortgage payment. Your cash flow on a monthly basis will increase substantially , on an average mortgage refinancing in Toronto and the GTA, over $1000 monthly. Besides cash flow is of course the big savings from not paying all of that interest. You can
now have all of your debts in a low rate mortgage refinance at around 3%. Over time , the principal amount of your debts can be paid off much easier than with the minimum payments used by credit cards
and their high interest rates.
Another option for doing a mortgage refinance is to use the funds to renovate your home and make improvements that will increase the value. Rather than getting a line of credit at rates around 4.5% currently, a mortgage refinance can be the cheaper option and provide the funds you need at a much lower cost. Refinancing a mortgage can also benefit you when buying a second home or investment property. You can refinance to get the downpayment out of your existing home equity and use it to buy
a rental property with can be used as an investment strategy. Consider this option as a way to build up your net worth over time, besides using stocks and mutual funds. Buying an investment property is a way
to diversify your assets, which is always important.
To process a mortgage refinancing application you will need to gather some documents for a mortgage broker. The usual items will be an existing mortgage statement , recent property tax bill showing the annual levies, a recent paystub and T4 slip showing total income for the year. A mortgage broker will prepare the refinance application for the lender and submit it with your credit report. To qualify for best mortgage refinance rates , you will need a credit score of about 680 or higher with most banks and lenders. There are some exceptions made for slightly lower credit scores , but in most cases, you’ll need a score of 680 or higher.