We first dealt with Riley Boychuk at Dominion Lending Centres: Residential & Commercial Mortgages when we became first time home buyers earlier in 2021. It was a huge step but we felt comforted the entire way through the process. I was full of questions and he was able to answer them in no time, in language that was easy to understand. When it comes time to renew the mortgage their is no question who we will call for information and advice. Our questions were answered and concerns addressed, it’s a great feeling to be comfortable with such a huge life event! I would not hesitate to recommend Riley Boychuk to anyone.
The Pros and Cons Of Refinancing
Like any mortgage product, refinancing has advantages and disadvantages. By making sure you know what they are, you can make the right decision based on your situation. Here are some of the top pros and cons of refinancing that you’ll need to consider:
Pros
1. Peace of mind
If you’re looking to relieve financial stress, you can consider consolidating your high-interest debt into a single monthly payment through the process of refinancing. This process not only simplifies things into one payment, but it also brings your high-interest monthly payments down to a far lower interest rate, ultimately resulting in thousands of dollars in savings each month.
2. New interest rate
Mortgage refinancing is typically available at the market’s current interest rates. While these rates will be unique to each person’s own financial situation, they will almost always be substantially lower than that of your average credit card, line of credit, car loan, student loan, etc. Hence the opportunity to tie everything together under one roof and reap the financial savings.
3. Options
When working with your trusted mortgage broker, you will find countless options that are unique to your very own situation that provide a solution to your needs. Certain alternative lenders are willing to consider a wide array of non-traditional sources of income, that of which include those who are self-employed individuals. These lenders are even flexible with different debt ratios as their guidelines are far more flexible than what you’ll see on the conventional side with Big Banks.
Cons
1. Additional costs
Refinancing your mortgage entails additional costs like early payment fees. These penalties will depend on how close you are to the maturity of your mortgage. You’ll also need to pay for an appraisal of your home as the amount of equity available through refinancing your home is based on the current appraised value of the property, less on your mortgage balance.
2. Longer amortization
When you refinance your mortgage, it may mean you’re stretching out your amortization to keep the payments affordable. While this is helpful, it could affect your ability to save up for retirement.
3. Requalification
By refinancing your mortgage to incorporate debt, you’ll need to qualify for a new mortgage. If your financial circumstances have changed, getting refinanced could be challenging. If you feel you won’t be eligible with a traditional lender, talk to your mortgage broker about alternative options.
