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Refinancing Home Mortgage Canada Article
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The Risks of Refinancing
from:Refinancing your mortgage is a great way to achieve lower interest rates, build equity, and get some much needed cash. There are a number of benefits for those that go through with refinancing but much like a double edged sword, refinancing can cut deeply, usually into the wallet.
It is said that to make money one must take risks and while this may prove true and in many cases, these risks may also be too great and simply not worth it. So, before you refinance take all the risks into consideration and then make a decision that will not make your situation worse.
The most important thing to do is to read the fine print on your mortgage, this will pretty much tell you if you should refinance and if the risks are well worth it. Even if you have to find a high powered magnifying glass the effort is worth it. Some mortgages have penalties associated with early payment of the mortgage which can out weigh the profit you will receive from refinancing.
There are several things to consider before you go through refinancing; the amount of time you choose to spend in your home is an important consideration as this will determine if it is all worth while. If you refinance will you remain in your home long enough to break even and pay off the new closing cost? If this is the case, then you should go ahead and refinance. This can be determined by taking the profit of the new mortgage and dividing that number into the additional amount you owe. If you plan to move or sell your house before that time period expires then there really is not any reason to refinance your mortgage.
You will have to determine if you are going to refinance using a fixed mortgage or variable mortgage. A fixed mortgage keeps the interest rates at the same level while the variable can flux either up or down, at any given time. If you are going to own your home for decades then using a fixed mortgage rate to refinance will benefit you in the long run. If you plan to sell before interest rates have a chance to increase, a variable rate will be the best.
Another important factor to think about concerning the risks of refinancing is the reason you want to do it. Is the end result of such an action truly worth it? If you are planning to use the money you gain from refinancing as a way of quickly gaining cash to buy a boat, clothes, or to take a trip, you may want to rethink your plan. However, if you plan to reinvest the money or spend it on college or some other pursuit that will yield greater benefit and present little set back, then refinancing may be right for you.
Refinancing mortgages simply will not sit well with everyone's stomachs. And even if you find yourself with a seemingly perfect opportunity to lower your interest rates while keeping your monthly payments down, keep in mind everything that you are putting on the line. Weigh the risks and benefits carefully before deciding to refinance your mortgage.
Refinancing Home Mortgage Canada Specific links
Refinancing Home Mortgage Canada News
Mortgage brokers warn about new refinancing rules - Globe and Mail
 Globe and Mail | Mortgage brokers warn about new refinancing rules Globe and Mail Canada's mortgage brokers are warning the banking regulator that its proposed mortgage underwriting rules could result in people losing their homes. The brokers are concerned about a number of the potential rules, but the one that worries them most ... |
A place to live - or an investment? - Vancouver Sun
A place to live - or an investment? Vancouver Sun In the same vein, an investor would hesitate to refinance a mortgage (ie, take out a second mortgage) or draw down a home equity line of credit unless the borrowing could be so arranged as to meet the Canada Revenue Agency deductibility test of being ... |
US 30-year mortgage rate falls to record 3.79 pct. - KWQC 6
US 30-year mortgage rate falls to record 3.79 pct. KWQC 6 More >> By MARCY GORDON AP Business Writer WASHINGTON (AP) - Average US rates for 30-year and 15-year fixed mortgages fell to record lows for the third straight week. The steady decline has made home-buying and refinancing more affordable than ever for ... |
TEXT-Fitch corrects Canadian covered bond regulations release - Reuters
TEXT-Fitch corrects Canadian covered bond regulations release Reuters May 10 - Fitch believes Canada's exclusion of insured mortgages from regulated covered bonds is likely to increase the cost of future issuance via higher credit enhancement levels. This measure may also cause a contraction in credit availability, ... Correction: Canadian Covered Bond Regulations May Increase Cost |
Business Highlights - Boston.com
Business Highlights Boston.com US 30-year mortgage rate falls to record 3.79 percent WASHINGTON (AP) -- Average US rates for 30-year and 15-year fixed mortgages fell to record lows for the third straight week. The steady decline has made home-buying and refinancing more affordable ... |