Refinancing To Find Hidden Equity
With interest rates in Canada sitting at a record low (0.5%), now may be the best time to consider refinancing your mortgage. Refinancing is in order to pay off debt in other areas. Many people may see this as the same as using a credit card to pay another credit card bill, but this perception is entirely inaccurate. Interest rates on a mortgage are almost always far below the interest rates of credit card debt and other loans. Consolidating that debt into the lowest interest rate possible will reduce your overall monthly payments, saving you money in the end.
What is Refinancing?
Refinancing allows you to increase your total mortgage in order to acquire some extra equity right away. Your mortgage payments may or may not increase, depending on a number of factors. You also may be penalized for refinancing before the end of certain terms. It’s always best to speak with your mortgage specialist to see when the best time to consider refinancing is.
Why Should I Consider Refinancing?
- Debt Consolidation – Payoff high interest loans and credit cards with your extra equity.
- Purchase Another Property – Use your extra equity to purchase a second home or a rental property. Depending on the market, the value of the second property could offset the increased mortgage.
- Investing – By investing wisely you could see returns much higher than the original equity you received from the refinance.
- Renovation – Keep an eye out for government grants related to renovation and remodeling. Sometimes a little extra equity will allow you to greatly increase the value of your home.
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Rasha Ingratta & Mortgage Associates
By Mortgage Intelligence
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