Thursday, 22 November 2018 For most people, their monthly mortgage is their biggest expense. While a home is also an important investment and one that serves you in many ways, it’s always wise to be mindful of opportunities to decrease your mortgage rate so that you can reduce the overall amount due.
To secure a low rate mortgage, you may wish to refinance your mortgage. This can help save you money over the long run. Bear in mind that before you do this, you need to understand your refinance penalty and how this may affect your potential savings.
The largest cost of refinancing frequently comes in the form of your mortgage breakage penalty.
This is used to help the lender recover some of the lost revenue associated with the determination of your mortgage contract. Within a variable mortgage, you’d be responsible for paying three months’ interest.
On a fixed rate mortgage, you will have to pay the interest rate differential or three months’ interest, whichever is greater.
You may also be responsible for legal fees associated with registering a new mortgage on your home. The legal fees may be covered if the mortgage loan is between $250,000 and $300,000.
Consider tapping into some of your home’s equity to consolidate debt or finance additional projects if you wish to refinance to a lower mortgage rate.
You may be able to consolidate all of this debt together by taking outstanding personal lines of credit, auto loans, or credit card debt and combining all of this debt into your mortgage.
Are you not sure of your next steps, but know that you could benefit from talking with some of Canada’s top real estate lawyers? Contact us today.
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