Refinance and Save $$$
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When you are thinking of refinancing your mortgage, now is a good time to reassess your borrowing needs.
Refinancing your mortgage can allow you take advantage of the equity in your home for any number of reasons such as:
-create lower mortgage payments and increase cash flow
-home renovations
-free up money for future investments
-consolidate debts
-pay for post secondary education
You may have heard about rock bottom mortgage rates and are asking the question.
Is this the best time to refinance?
With the lower interest rates, it’s possible to save thousands of dollars!
The example belows shows an existing mortgage of $100,000 with a rate of 5.9%, refinanced to a new lower rate of 4.29%. The monthly payment (P & I) savings are shown x 60 months (5yr term) for the new term.
The example is based on a 5yr closed term, 35yr amortization, semi-annual payments.
Subject to change without notice. E & O. OAC.
| Mortgage amount |
Rate |
Monthly payment |
| $100,000 - Current mortgage |
5.9% |
$558.74 |
| $100,000 - Refinanced with new lower rate |
4.29% |
$458.03 |
| Savings per month (P &I) mortgage payment |
|
$100.71 |
| x 60 monthly payments (5 yr term) |
|
|
| Total payment savings over the term |
|
$6,042.60 |
THINGS TO CONSIDER
CURRENT VALUE OF YOUR HOME
Has the value of your home gone up or down since you bought it?
Typically most lenders will refinance your mortgage up to 90% of the current market value based on qualifications. There are products and lenders that will refinance your mortgage up to 95% and one that will go up to 100%.
There are stringent guidelines to refinance your mortgage to 100%.
YOUR CREDIT
How good is your credit? If your credit is good, you will likely succeed with the best mortgage rates available.
If your credit has some blips, you will either need to correct it, or settle for less than best mortgage rates.
Mortgage lenders are viewing credit very seriously and look at everything.
If you want to refinance your mortgage to 95% or 100% your credit score needs to be high and your credit super clean!
MORTGAGE RATE
What is your current mortgage rate and the new mortgage rate you are looking at?
In order for it to be in your benefit, you would want to have a mortgage rate that is about 1% lower than what you have.
This all depends on the cost to pay out your existing mortgage and what mortgage product you are looking to acquire.
COSTS TO CONSIDER
LEGAL
You may need a lawyer or notary to register the new mortgage.
APPRAISAL
Depending on the mortgage loan amount and the value of your home, an appraisal may be required.
PENALTY
There will likely be a penalty or an IRD cost (Interest Rate Differential) – loss of interest to the lender. This need to be factored into the calculation to see at what time you would recoup this cost.
DISCHARGE AND OR TRANSFER FEES
There may be a discharge and or transfer fee from your existing lender.
VERICO ZANDERS & Associates Mortgage Brokers Inc. will help you access all your costs to refinance your mortgage. Some, all or none of the above costs may apply, depending on your individual situation.
Contact us to do a complete review and proper analysis of your mortgage needs. Susan Zanders, Alicia Zanders and Donna Styba, mortgage brokers, VERICO ZANDERS & Associates Mortgage Brokers Inc. will ensure you get the best rate and product to suit your current and long term financial goals. We are experienced and know what to look for. We will negotiated on your behalf. We will walk you through the process. To look at some preliminary numbers check out our refinance calculator and see how much money you can save.
Contact us before you go to the bank or renew. Many people just sign a renewal or contact the bank only to find out later they did not get the best possible product and rate for their situation. We have access to mortgage promotional products that are not published.
