Mortgage Refinance Mississauga
Are you a homeowner living in Mississauga who is looking to save some money or perhaps even access some cash from your home equity? If you are, then one of the strategies you should know about is something called a mortgage refinance.
What is a mortgage refinance?
When you hear someone talking about refinancing their mortgage, it means that they are breaking their current mortgage to get a new one. Oftentimes when people refinance, they refinance for a larger amount than what they currently owe on their first mortgage. Their first mortgage is paid off through the refinance, and whatever amount extra they borrowed is given to them in cash to do with as they please. (Most lenders will allow you to borrow up to 80% of your home equity).
They then make monthly or bi-weekly payments on their new mortgage just as they did with their first mortgage.
Why should you choose a mortgage refinance in Mississauga?
There are a number of reasons why people choose to refinance their mortgages including:
- You can save money on interest – If interest rates have fallen since you got your first mortgage, then you may wish to refinance in order to save money on your payments. Even a small savings can make a big difference over the years that it takes to pay off your mortgage.
- You can change the type of mortgage that you have – Perhaps your current mortgage is a bad credit mortgage, but you can now qualify for a traditional mortgage. If this is the case, you stand to save quite a bit of money through refinancing. Likewise you may be in a situation where you wish to switch from a fixed rate mortgage to a variable rate mortgage or vise versa – refinancing can help you do that.
- You can consolidate debt – One of the most common reasons for mortgage refinancing in Mississauga is to consolidate debt. Since mortgage interest tends to be much lower than the interest on other types of loans, you can borrow from your home equity when you refinance in order to pay off debt. This allows you to roll are of your high interest consumer debt into one easy monthly or bi-weekly payment while also lowering your interest rate. This can mean getting out of debt years sooner.
- You can access money from your home equity to fund large projects or expenses. Another reason you might want to refinance and borrow from your home equity is to cover large expenses such as home improvements or starting a business. Again, this often makes sense because the interest rate is usually much lower than on other types of loans.
How to get the best rates for mortgage refinances:
There are two keys to getting the best rates on a mortgage refinance. The first is to have good credit. The second is by working with a professional mortgage broker.
Having good credit means that you will be able to get your mortgage through a traditional or “A” lender such as a bank or credit union. These lenders only lend to the least risky borrowers so they can offer the best rates.
Working with a mortgage broker means that regardless of your credit, they will be able to find the best rates for you. If you have good credit, your broker will be able to negotiate the best rate with an A lender for you. If your credit is damaged, your broker will find you a suitable lender and negotiate the best possible rate for your situation.
How to get a mortgage refinance even with bad credit:
As mentioned, if your credit is poor, you will not be able to get a mortgage refinance with a traditional lender like a bank or a credit union. The good news is however that as long as you have enough equity in your home, you can usually still refinance your mortgage – even if you have bad credit.
There are many lenders in Mississauga who specialize in helping those with bad credit. These are alternative lenders or private lenders.
Professional mortgage brokers work with dozens of lenders including many who specialize in helping those with poor credit. They will work to match you with the best lender for your circumstances, and they will help you steer clear of those lenders who are not reputable.
Advantages of a using a mortgage broker for a mortgage refinance:
While it is possible to get a mortgage refinance on your own, it is much more advantageous to work with a mortgage broker. Some of the advantages of working with a mortgage broker include:
- Determine if refinancing is the right choice for you.
- Get the best interest rate.
- Access specialty lenders
- Get professional help and advice.
Mortgage refinancing has many benefits, but it may or may not be the right strategy for you. When you work with a professional mortgage broker, they will look at your current situation to help you determine whether mortgage refinancing or another strategy (such as a second mortgage or home equity line of credit) is the best option for you.
Shopping around and comparing the offerings of various lenders takes time and effort. But mortgage brokers have relationships with many different lenders, so it is much easier for them to find you the best rate that you can get.
Depending on your situation, your best bet for a mortgage refinance might be through a speciality lender that specializes in helping people with poor credit, who are self-employed, etc. Some lenders will only work through a mortgage broker, so you would not be able to access them on your own. By working with a mortgage broker, you’ll be ensuring that you have access to the widest possible range of lenders.
Another huge advantage of working with a mortgage broker is that they are there to walk you through the process, to help make sure that all of your information is provided, and to answer any questions that you may have.