Key Reasons to Refinance Your Mortgage

If you're a homeowner, you know how important it is to keep an eye on your mortgage. It's often the largest financial commitment you'll make, and it's important to ensure that you're getting the best deal possible. One way to do that is by refinancing your mortgage. Refinancing involves taking out a new mortgage to replace your existing one. In this blog post, we'll discuss some of the key reasons why you might want to consider refinancing your mortgage.

Lower Interest Rates

One of the most common reasons to refinance your mortgage is to take advantage of lower interest rates. Interest rates fluctuate over time, and if rates have gone down since you took out your mortgage, you may be able to save a significant amount of money by refinancing. Lower interest rates mean lower monthly payments, which can free up your cash flow and help you save money in the long run.

Shorten Your Mortgage Term

Another reason to consider refinancing is to shorten the term of your mortgage. If you're currently on a 30-year mortgage but you're able to make larger payments, you may be able to refinance to a 15 or 20-year mortgage instead. This can help you save money on interest payments and build equity in your home faster. Just be aware that shorter mortgage terms often come with higher monthly payments, so make sure you can afford the new payments before making the switch.

Cash-Out Refinancing

Cash-out refinancing is another option to consider if you need access to cash. With cash-out refinancing, you take out a new mortgage for more than your existing mortgage balance and pocket the difference. This can be a good option if you have a large expense coming up, such as a home renovation or college tuition, but be aware that you'll be increasing your overall mortgage debt.

Convert to a Fixed-Rate Mortgage

If you currently have an adjustable-rate mortgage (ARM), you may want to consider refinancing to a fixed-rate mortgage. ARMs typically have lower interest rates than fixed-rate mortgages, but the interest rate can change over time, which can make it difficult to budget for your monthly payments. By refinancing to a fixed-rate mortgage, you'll have a predictable monthly payment and won't have to worry about interest rate fluctuations.

Remove Canadian Mortgage and Housing Corporation (CMHC)

If you didn't make a 20% down payment when you purchased your home, you're likely paying for Canadian Mortgage and Housing Corporation (CMHC). CMHC is designed to protect the lender in case you default on your mortgage, but it can add a significant amount to your monthly payment. If you've built up enough equity in your home, you may be able to refinance to remove CMHC and lower your monthly payment.

Refinancing your mortgage can be a smart financial move, but it's important to consider all of the factors before making a decision. If you're interested in refinancing your mortgage, contact FAIRCHOICE Mortgage Co. today. Our team of experts can help you navigate the process and find the best mortgage solution that suits your unique needs. We're committed to providing our clients with clarity and financial solutions that make sense. To get in touch with us, please click here or call us at (905) 625-2288.