Helps Oakville Residents See How Refinancing Can Work For Them
Financing a home used to be a fairly
straightforward option. Buyers would pay their 25% down payment, negotiate a
rate, and have it paid off in 25 years. However, now there is a wide variety of
ways to pay off your home or use the equity in the home for other financial
considerations. There are fixed rates, variable rates, private mortgages,
second mortgages, and more. A bit of number crunching with a mortgage
quickly allows Oakville homeowners to
see what a difference all the variables can make. Here are a couple of options
that might not be on your radar.
If your financial situation isn’t
working well for you, look to change it. Perhaps your financial circumstances
have changed and your original payment plan doesn’t work. Perhaps you can get a
better rate of interest. Perhaps you want to pay a significant part of your
mortgage off. Or perhaps you want to extend your mortgage to consolidate
accumulating debt or finance a renovation. These are all good reasons to
refinance your home.
To get an accurate snapshot of the
various options available and their financial implications, input the terms of
your existing mortgage into a refinancing
that is able to compare the terms of
an original mortgage with a new one. Using a mortgage calculator will give an
accurate picture of the financial implications of decreasing interest rates,
increasing payment frequency, shortening amortization periods etc. Be sure to take into account any penalties or
costs involved in cancelling an existing mortgage and arranging a new one.
A second mortgage is a loan secured
with the equity in your home. Second mortgages can be used to consolidate debt,
pay for education, to cover the costs of home renovation or university
education. Again, before accumulating more debt, gather information before
making a decision. Make sure you know what level of debt you are confortable
with, what your monthly income and expenses are, and have an idea of your
overall financial goals. A mortgage calculator can help you see the financial
implications of taking on a second mortgage, by comparing rates and terms before
you embark on the process. Typically, second mortgages are considered a higher
risk and have a higher interest rate.
You’ve Crunched the Numbers
While those looking for financing often
turn to the big banks, there are some good alternatives out there. Private
lenders may be able to offer better terms that have more flexibility. Have a
mortgage broker go over your finances and explain all the options clearly.
Don’t feel rushed or pressured. Make sure you understand the implications and
small print before signing anything. A great place to educate yourself on the
ins and outs of home financing is the Financial
Consumer Agency of Canada.
Punching numbers into a mortgage calculator
can help Oakville homeowners begin to see the possibilities of how to best get
hold of their finances. Whether you are looking to get better terms for an
existing mortgage or want to use home equity to consolidate debts or finance a
new venture, it’s important to be informed about all the implications.