When To Refinance Your Mortgage

Much of this information regarding real estate/mortgage acceleration tactics may seem redundant to you. I am sure you have heard of many of these principles or strategies for paying off your mortgage early. There are pros and cons to paying off your mortgage early. Keep in mind most people keep a mortgage no longer than a few years. In fact the median time living in a particular piece of real estate is only nine years. Also the interest that you pay on your mortgage could be a tax write off you can take advantage of every year as well.

Let’s start out by clarifying a few things that may make a reverse Ravenwood London easier to understand. First, a reverse mortgage does not lend you all of your equity, just a portion of it based on a few factors. For example, a 75 year old may get around 65% of the value of their home. This is known as your loan to value.

Although this looks like an advantage it is rather a big disadvantage. The reason for this is that the whole time that you are busy paying only interest, you pay nothing off the mortgage. If they would allow it you can go on paying the same amount of interest forever and never pay a cent off the Mortgage broker.

Property Purchase Tax – some provinces (ex. British Columbia) charge a purchase tax. Unlike GST, lenders aren’t usually willing to help finance this cost in the mortgage. This may be an “out of pocket” expense for you.

Mortgage Program – The program you qualify for and choose will determine a lot about your loan. How much you need to put down, reserves requirements and necessary credit criteria are based on the mortgage program. Speaking with a mortgage banker is the best way to find out more about specific mortgage programs and qualifications.

Mortgage brokers work on the basis of commission. They don’t charge anything from the borrowers or their clients. Yet, they are paid by the lenders or banks. As being professionals in the market, the broker works like an agent for the lender. They are hired by lenders to sell their mortgage products to the borrowers. That is why they are not paid by the borrowers; instead they receive money from the lenders. Brokers decide themselves for the charges they are going to earn from the lender. They basically earn from loan origination fee, processing fee or yield spread premium. In some cases, they might charge from the borrowers.

Watch Interest Rates: Whenever interest rates drop, consider refinancing your home loan with your lender. The money you can save with a reduced interest rate can go a long way toward repaying the loan more quickly. Keep in mind that the fastest way to reduce the duration of the home loan in this instance would be to keep making the mortgage payments you are used to, rather than the reduced rate that the refinance may have created.