Mortgage Refinance

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What is Mortgage Refinance?

Mortgage refinance is replacing an existing mortgage with a new one, typically with more favorable terms such as a lower interest rate, lower monthly payments, or a shorter loan term.

When you refinance your mortgage, you pay off your old mortgage with a new one. This can be beneficial when interest rates have fallen since you took out your original mortgage, as you can secure a lower rate and save money on interest over the life of the loan.

There are different types of mortgage refinance, such as rate-and-term refinancing, cash-out refinancing, and streamline refinancing. Each type of refinancing has its own benefits and considerations, so it’s important to do your research and understand your financial goals before making a decision.

Types of Mortgage Refinancing

Types of Mortgage Refinance

There are several types of mortgage refinancing, each with its own benefits and considerations:

  1. Rate and term refinancing : This is the most common type, in which you replace your existing mortgage with a new one that has better terms, such as a lower interest rate, a shorter loan term, or a different type of mortgage. The main goal is to reduce your monthly payments or save money on interest over the life of the loan.
  2. Cash out refinancing : This type of refinancing allows you to tap into your home’s equity by borrowing more than you owe on your existing mortgage. You can use the extra cash for debt consolidation, make home improvements, or invest in other areas. However, you’ll need to have enough equity in your home to qualify for cash-out refinancing, and you’ll be taking on more debt.
  3. Streamline refinancing : This type of refinancing is designed to be quicker and easier than traditional refinancing, with less paperwork and fewer fees. Streamline refinancing is typically available to borrowers with good credit and a solid payment history, and it can be a good option if you want to lower your interest rate without going through the full refinancing process.
  4. Adjustable-rate mortgage (ARM) refinancing : If you have an adjustable-rate mortgage, you may be able to refinance into a fixed-rate mortgage to lock in a lower rate and avoid future rate increases. Alternatively, you could refinance into a new ARM with better terms, such as a lower initial rate or a longer fixed-rate period. ARM refinancing can be a good option if you want to take advantage of falling interest rates or avoid future rate increases.

Pros & Cons

Benefits of Mortgage Refinance

Mortgage refinancing can provide several benefits, including :

  • Lower interest rates : Refinancing can help you secure a lower interest rate on your mortgage, which can reduce your monthly payments and save you money over the life of the loan. A lower interest rate can also help you pay off your mortgage faster.
  • Reduced monthly payments : Refinancing can also help you reduce your monthly payments by extending your loan term, which can help you manage your cash flow and free up money for other expenses.
  • Improved credit score : If you’ve been making on-time payments on your existing mortgage, refinancing can help you improve your credit score by reducing your overall debt and increasing your available credit.
  • Home equity : Refinancing can also help you tap into your home equity, which you can use to pay off other debts, make home improvements, or invest in other areas.
  • Simplified finances : Refinancing can help you consolidate your debts, making it easier to manage your finances and reducing the number of bills you have to pay each month.
  • Flexibility : Depending on the type of refinancing you choose, you may be able to adjust your loan term, interest rate, and monthly payments to better fit your financial goals and needs.

How to apply

How to apply for mortgage refinance in Ontario

If you’re looking to apply for a mortgage refinance in Ontario, here are the general steps to follow :

  • Determine your financial goals : Before applying for a refinance, determine what your goals are. Do you want to lower your monthly payments, shorten your loan term, or access your home equity? Understanding your goals will help you choose the right type of refinance.
  • Check your credit score : Your credit score plays a big role in your ability to qualify for a refinance and the interest rate you’ll receive. Check your credit score before applying and take steps to improve it if needed.
  • Gather your financial documents : You’ll need to provide several financial documents when you apply for a refinance, including your current mortgage statement, pay stubs, tax returns, and bank statements. Make sure you have these documents ready before applying.
  • Shop around for lenders : Research different lenders and compare their rates and terms to find the best refinance option for your needs. Consider working with a mortgage broker who can help you find the best lender and navigate the application process.
  • Apply for the refinance : Once you’ve found a lender, you’ll need to fill out an application and provide the required documents. The lender will review your application and determine if you qualify for a refinance.
  • Close the refinance : If you’re approved for the refinance, you’ll need to sign a new loan agreement and pay any closing costs. Once the loan is funded, your old mortgage will be paid off, and you’ll start making payments on the new loan.

Why Choose Good Advice For A Better Life For Mortgage Refinance?

Choosing us for your mortgage refinance, We can save your money, help you to make informed decisions, and ultimately lead to a better financial future.

Give us a call today at (289) 804-0857 to schedule a free, no-obligation consultation.