Mortgage Refinancing Vs. Renewal: What Is the Right Option for Your Edmonton Home?
It is essential to understand the difference between renewing your mortgage and mortgage refinancing in Edmonton. In Canada, the longest contract term on a mortgage is typically ten years. While the amortization can be over 30 years in some cases, the mortgage will have to be renewed several times over the life of the mortgage. This means that when your current mortgage contract term is up, you will have to renew or refinance your mortgage.
Renewing your mortgage is pretty simple. The term is up, and you still owe money on the mortgage. The bank will get in touch with you and offer you a new term. In many cases, they will offer you several different terms with different interest rate options. You basically have to choose the term you want, sign the form, and send it back in. You should check with a broker to make sure that the terms you are being offered are competitive.
Mortgage refinancing in Edmonton can be done at any point; you do not have to wait for the contract term to be up in order to refinance. If you bought your home over a decade ago, it is likely that you are paying interest rates that are much higher than the current going rates now. Interest rates in Canada are at historical lows, and financial analysts are reporting that rates will be going up in Canada soon, depending on market conditions. So, if you have been thinking about mortgage refinancing to take advantage of a lower rate, but have been putting it off, the time to do it is now.
In the case of refinancing you will want to sit down with your mortgage broker and go over all of the details about the cost to refinance, what your new payments will look like, and other ways that you can change it to fit your needs. Don’t forget about the payout penalty if you are not quite finished the current term.
Say you lost your job or recently had to take a significant pay cut. You put off refinancing to get a better rate for the last few years and now your mortgage payments are getting too expensive for the amount of income you have. You can go down to the bank in Edmonton, or you can talk to your mortgage broker about getting a lower rate and lower mortgage payments by refinancing and re-extending the amortization period.
As you can see mortgage refinancing in Edmonton may not just help you to save money on paying interest to the bank, but it can also help you out of a jam and possibly losing your home if things go from bad to worse.
If you have paid off a significant amount of your mortgage, or alternatively you have been in your home for around ten years, then mortgage refinancing in Edmonton could save you a substantial amount of money on your payments.
Our expert mortgage brokers can guide you through the mortgage refinancing process no matter what your situation is. Contact us today to get started!Request Mortgage Info