Refinancing a mortgage entails breaking the home loan contract that is currently operational and acquiring a new loan with which to pay off the outstanding mortgage balance in full. The new mortgage comes with its own interest rates, terms, and conditions. By refinancing your mortgage, you can transform your home equity into cash.
When you refinance your mortgage, you can also do so at a lower interest rate, thus paying less for your second mortgage than you did for the first. If you are considering refinancing your mortgage anytime soon, you should avail yourself of the services provided by a mortgage broker in Calgary to do this. A broker has the insights and knowledge needed to help you refinance your home loan in a way that is beneficial for you.
How Mortgage Refinancing Works
- Applying for mortgage refinancing is similar to applying for a mortgage to buy a home for the first time.
- Your credit history, debt service ratio, and income shall be evaluated.
- You shall also have to undertake a home appraisal to determine the current value of your property.
- You also have to undergo a mortgage stress test, just like you did for your first loan.
How Much Can Be Borrowed for Mortgage Refinancing
- The amount of money that you can borrow for your second mortgage is determined by the value of your home equity.
- Up to 80% of your home’s appraised value can be borrowed as a second mortgage, but a certain portion of this amount will have to be paid towards your outstanding mortgage balance.
- The amount that remains can be used for clearing unwanted expenditures and other liabilities that you may have, such as personal loan payments or credit card overdues.
What are the Benefits of Refinancing?
Refinancing your home loan can be beneficial for you in the following ways –
- Enables you to Negotiate Better Terms and Interest Rates for the New Loan: When you refinance your home loan, you get to obtain a new loan for an interest rate that is lower than the interest you were paying for your first loan. You can also secure a lengthier amortization schedule and terms and conditions that enable you to pay off your loan ahead of schedule.
- Allows you to encash Home Equity Value and Consolidate Debt: By refinancing your loan, you can encash your home equity value to consolidate debt, and pay off any liabilities that you have, like credit card payments, or the repayment of a personal loan, after clearing your outstanding mortgage balance first.
How a Mortgage Broker Can Help with Refinancing
You will benefit greatly if you use the services provided by a mortgage agent Calgary to refinance your home.
- Helps you Access the Lowest Interest Rates for Refinancing: A mortgage agent can help you refinance your mortgage at the best mortgage interest rates Calgary. A broker or agent, is connected to many different lenders such as alternative or B category lenders, private lenders, banks, and credit unions. By working with a broker, you can obtain a second mortgage from such lenders, at interest rates which are far more reasonable than the rates that are charged by most of the top Canadian banks for loan refinancing. You can save significant costs on the repayment of your second mortgage because of this.
- Provides Customized Solutions for your Refinancing Needs: A mortgage agent Calgary will assess your financial situation and help you apply for a second loan that is well aligned with your current financial needs. With the guidance of a broker, you can choose a second loan whose terms and conditions are flexible, and repayment of which can become easier for you.
- Performs all Necessary Documentation for Mortgage Refinancing: All documentation or important paperwork related to the process of applying for mortgage refinancing shall be taken care of by the mortgage agent, thus making such a process quite easy and seamless for you.
Tips to Consider when Choosing a Mortgage Agent in Calgary
If you are looking for the top mortgage agents Calgary to help you with loan refinancing, you should consider hiring an agent who has the following qualities –
- A broker must have extensive insights or knowledge about the mortgage market in Calgary if he is to help you choose the best terms and interest rates for a second mortgage. Brokers who have been working in the mortgage industry for the last five years should be considered, as these are individuals who can give you the guidance and support that you need to make a wise and informed decision concerning your second mortgage.
- The agent you choose needs to hold a license.
- The agent should have positive statements and reviews about his services, mentioned by clients on his official website.
Final Thought
Refinancing your home loan in Calgary is certain to be a seamless process if you avail yourself of the services of a mortgage broker in Calgary to do this. A mortgage broker can give you the best insights and updates that you need to apply for mortgage refinancing at low interest rates, and for terms or stipulations that are flexible, and which make it convenient for you to repay your second loan.
