Top 10 Reasons to Refinancing your home

When interest rates are rising, refinancing may make sense locking in to a rate before they go higher.
Refinancing your home to lower your interest rate is a sensible idea, but not the only reason to.  There are other reasons a home owner may consider refinancing their current mortgage.

1. Lower borrowing rate. A lower rate could mean thousands of dollars savings in interest over the life of a mortgage. Borrowers with bad credit, might qualify for significant rate change with improved credit.
2. Consolidating credit cards and other debt at a lower rate is also a prudent move.  This will increase cash flow and lessen the burden on making many payments instead of one.  Consolidating before falling behind payments would be proactive and highly recommended.
3. Merging a 1st and 2nd mortgage into one.  Having a 2nd mortgage, should be a interim or short term solution.  Carrying a higher rate 2nd mortgage for more than a year can be expensive.  Ideally if you are unable to pay out the 2nd from your own sources, then refinancing your 1st and consolidating the 2nd is a good alternative.
4. Increasing the value of your home can be achieved from refinancing.  Any major home renovations will add value.  Refinancing and cashing out funds to support the renovation is a good idea.  You may find borrowing on a new 1st is cheaper than having to pay on 2nd mortgage interest payment option.
5. Making your home energy efficient can be an expensive project.  In some cases there are government sponsored assistance if you improve you make your home more energy efficient.  Refinancing can be used to fund this project which would reduce the home’s energy costs.
6. Spousal buy out situations.  If you and your partner have decided to part ways, one spouse an buy out the other.  Refinancing allow this to happen and remove the departing spouse from title.
7. Investments can be in the form of real estate, or paper investments.  Cashing out by refinancing your home is a viable method.  A second home, or investment property can bring significant returns as compare to the cost of funds.
8. Tax arrears.  You may be in a situation where you owe large sum of money to Revenue Canada, or you are in arrears with property taxes.  Some lenders will allow you to refinance your home to pay off your back taxes.
9. Education.  Post Secondary and Graduate Programs can be expensive.  If you need to access funds to help you child, you can consider refinancing your home.
10. Reverse Mortgage.  If your in your retirement years, a reverse mortgage may be what you need to supplement your pension amounts.  Under the CHIP program essentially your are refinancing your home to access the equity.

If you are in any of these situations and are thinking of refinancing your home, contact us for for a free no obligation consultation.

Aldo Mormile is a senior mortgage agent with Mortgage Architects.

He can be reached at416 219-7486 or 1-877-237-2601