Home mortgage refinancing in Ontario is a very viable
option that more and more homeowners have come to rely upon to raise much
needed capitol. The most common reason that homeowners refinance their homes
are:
1.
To negotiate a lower interest rate on their
mortgage
2.
To consolidate debt
3.
To finance big ticket purchases like home
renovations, children's education and expensive home furnishings/appliances,
just to name a new.
The reason that home mortgage refinancing in Ontario has
become so popular is because consolidating debt and big ticket purchases is much
cheaper when leveraging home equity. A mortgage or home equity loan is much
less interest than credit cards, lines of credits and personal loans. There is
also much more flexibility with monthly payments, and monthly payments are
generally much lower.
Here are our top 3 mortgage financing tips if you are
thinking of applying for home equity refinancing in Ontario.
Mortgage financing tip #1 – Establish a relationship with
a local Mortgage Broker. This will increase your borrowing power and ensure
that you obtain a competitive deal on your new mortgage. Mortgage Brokers in
Ontario arrange mortgages through all the major banks, plus they have access to
alternate funding sources like trust companies, credit unions, mortgage
investment corporations and private lenders.
Often times when your bank won't approve mortgage
refinancing or won't offer you a better mortgage interest rate, a Mortgage Broker
will be able to secure the financing. Also, when you go directly to your bank
there is no competition. You will only be offered what they want to offer you
and each time you apply for credit it results in another inquiry on your credit
report, which can impact your credit score. A Mortgage Broker will request your
credit report in a single instance and use the credit report to shop your deal
around.
Mortgage refinancing tip #2 – Check your credit report
before looking for financing. Request your credit report to ensure that there
is nothing improperly reported and so that you know your credit score before
looking for a mortgage. Your bank will generally approve credit based on your
credit score. The lower it is, the higher the interest rate they may offer you.
Sometimes it pays to see and work on having a good credit score before looking
for mortgage refinancing in Ontario. Generally in Ontario a 680 beacon score is
considered good.
Mortgage refinancing tip #3 – Use an online mortgage
calculator to compare mortgage payments based on different amortizations. By
default, most banks will quote your new mortgage repayment based on a 25 or 30
year amortization. This is no way to get your house paid off quickly and will
mean that you end up paying more interest in the long run. Shaving years off of
your amortization often results in very little increase to your mortgage payment.
All in all mortgage refinancing could result in you
getting the most competitive deal, so it is important to do your research and
be prepared for when that time comes you are ready! For more information about
mortgage refinancing in Ontario and our mortgage financing tips please contact
Paul Mangion at GTA Mortgage Matters by calling 416-204-0156 or visit www.gtamortgagematters.com.
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