Mortgage Refinance Lawyer Toronto

Refinancing a mortgage can be a big decision in your life. Before you begin, you should consider why you may want to refinance. Your goal will help you decide your mortgage refinance process from the beginning. Here are a few reasons why you would want to refinance a mortgage:

• Reduce the monthly payment. When your goal is to pay less every month, you can refinance into a loan with a lower interest rate. Another way to reduce the monthly payment is to extend the loan term, for example from 15 year to 30 year amortization period. The result is easier cash flow management and more money available in the budget for other monthly expenses
• Tap into equity. When you refinance to borrow more than you owe on your current loan, the lender gives you a check for the difference. This is called a cash-out refinance, and here’s how it works. People often get a cash-out refinance and a lower interest rate at the same time. Many will use the equity that they took out to pay out their consumer debt for which the interest rates could be as high as 30% on balances owing. Some families take out equity to pay for school or minor renovations.
• Pay off the loan faster. Instead of extending repayment, you also can refinance into a shorter-term loan. When you refinance from a 30-year mortgage into a 15-year loan,you pay off the loan in half the time. As a result, you pay less interest over the life of the loan. You can also change your repayment schedule by switching from monthly to bi-weekly or weekly payments. However, a lot of the time , you may not need to do a refinance to change your payment schedule. Just reach out to your mortgage company and enquire if they will be willing to make the switch for you.
• Avoid Balloon payments: Some loans, particularly balloon loans, have to be repaid on a specific date, but you might not have the funds available for a large lump-sum payment. In those cases, you can refinance the loan using a new loan to fund the balloon payment and take more time to pay off the debt.
• Switch from an adjustable to a fixed-rate loan. Interest rates on adjustable-rate mortgages can go up over time, however are historically lower because you are taking on a risk that the mortgage payment may increase during the time of your loan. Fixed- rate loans stay the same during the whole term however are a bit higher. Refinancing an adjustable-rate mortgages to a fixed-rate loan provides financial stability when you prefer the same monthly payments for the duration of your loan.