Should You Consider Refinancing Your Home?

Posted by Alan Zunec on Friday, August 19th, 2011 at 10:52am.

Interest rates are at all time lows right now. If you have an existing mortgage it may be worth it to refinance, particularly if the rate you currently are paying is considerably more. But it is best to study the situation before actually getting that new mortgage.

One item to look at is when your current mortgage is up for renewal, and what the rates will most likely be at that time. Considering that different analysts often come up with conflicting answers that may be hard to predict. But consider this, the five year fixed rates currently available have not been seen for the last 50 years. The current five-year fixed rate is the lowest it has ever been in Canada.

That means that even if you refinanced your home for 50 percentage points less than your current rate means you could save thousands of dollars. Many people don’t take an active role in watching how their particular mortgage is performing. In this economic climate it would pay to do a bit of comparison. Taking your case to an Accredited Mortgage Professional or AMP, would be the best place to start.

Other important considerations before deciding on whether to refinance include how much and what type of debts you owe. You should add up what is owed, what type of debts they are and what the minimum payments add up to. This is important, because remortgaging a home does incur certain fees. It is best to find out if you can afford the costs and penalties associated with breaking your current mortgage and taking on another. Your AMP will look into all these factors, and more.

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