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Benefits From Mortgage Refinancing
If you are considering refinancing your house, you will need to review your existing financial situation and mortgage options thoroughly. Potential short-term gains, such as lower monthly payments, should align with your long-term goals. With many financial planning exercises, one size does not fit all. We hope our Mortgage Refinancing Guide will help you navigate through this maze.
- Debt Consolidation – since mortgage rates are generally lower than other forms of borrowing, you can use the equity in your home to pay in full high interest/high payment debts such as credit cards.
- Home renovations – the equity in your home can be used to finance home improvements, which can potentially increase your home value.
- Second Property – by leveraging your home equity, you could purchase an investment or vacation property.
- Investments – the equity in your home can be reinvested in other investments, such as mutual funds or stocks. In fact, depending on your investments and circumstances, a portion of the interest on your mortgage may be tax deductible.
- Education – you can refinance your home to fund education for your children, or for yourself, as an alternative to liquidating other investments or RRSP.
- Retirement planning – your home equity can also be used to make RRSP contributions. In many cases, the compounding benefits of long-term investments and tax deferrals could outweigh the penalty costs of discharging mortgage.
– breaking your existing mortgage and applying for a new one,
– increasing amount of your existing mortgage with your current lender,
– taking a second mortgage,
– applying for a home equity secured line of credit.
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