Back to: September 2019


When to refinance your mortgage?
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There are times when it makes sense to refinance your mortgage. It is, however, important to have a clear financial objective in mind to be able to choose the most appropriate loan.

Since interest rates are at a 40-year low, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. There are penalties for paying your mortgage loan out prior to renewal, however, these could be offset by the extra money you save through a refinance.

What's your goal?
Before deciding whether or not to refinance, you need to determine what you want to accomplish. Remember, a refinance doesn't pay off the debt; it just restructures it, often at a lower interest rate and a different loan term than the current mortgage.

1- Reducing the interest expense is the most common goal of a refinance. But some homeowners also appreciate the ability to extend the loan back out to 30 years, reducing the monthly payment.

2- Debt consolidation is another goal of refinancing. If you have both a first mortgage and a home equity mortgage, combining the two mortgages into one fixed-rate mortgage levels out the payment over the loan term.

3- Getting cash from your home. The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance. This is usually done when you want to finance an important home improvement, pay for college, or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.

When to refinance?
After determining your reasons for refinancing, you need to consider whether the timing and circumstances make this the right time to get a new mortgage.

You may be better off staying with your current mortgage. For example, if your current mortgage has a high prepayment penalty or if you plan to move from your home in the next few years or when the monthly savings gained from lower monthly payments may not exceed the costs of refinancing.

As a rule of thumb, it pays to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. Asking yourself a few questions may help you determine if you can save money:

  • How much can I lower my current monthly payment? 
  • How long do I plan to stay in the house after I refinance?
  • How much will I pay in refinancing costs? 

How to refinance?
Refinancing is similar to the process you encountered when you closed on your first mortgage. It requires an application, credit check, new survey, and title search, as well as an appraisal and inspection fees. As you know, this process can be quite lengthy and expensive.

Keep in mind, however, that by refinancing you may extend the time it will take to pay off your mortgage. That said, there are many ways to pay down your mortgage sooner to save you thousands of dollars. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal per calendar year. This will also help reduce your amortization period (the length of your mortgage), which in turn saves you money.

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OTHER ARTICLES
 

With Compliments of

Michele Vyge-Fraser
Real Estate Agent/ Associate Broker/ CNE®


Red Door Realty
1314 Cathedral Lane
Chapter House
Halifax, Nova Scotia, B3H4S7
T: 902-830-6397
D: 902-830-6397
NovaScotiaRealEstate@gmail.com
www.RedDoorRealty.ca



NATIONAL MORTGAGE RATES
Term Posted
Rates*
Best
Rates*
6 Months 3.34% 3.30%
1 Year 3.59% 3.04%
2 Years 3.74% 2.89%
3 Years 3.89% 2.79%
4 Years 3.95% 2.95%
5 Years 5.34% 2.69%
7 Years 5.80% 2.99%
10 Years 6.10% 3.04%
Variable Rate 2.90%
Prime Rate ** 3.95%
*last updated: Feb 18,2020


https://www.reddoorrealty.ca

388 Robertson Road, Egerton/Merigomish, Pictou County!

Fabulous Ocean Views Property ~ a Must Sea :)

List Price $825,000

Have you been dreaming of Nova Scotia Pictou County Seaside Living less than 2 hours from the Halifax Airport? Imagine warm Northumberland Strait waters, uncrowded sandy beaches, fabulous boating, easy fishing, and a beautiful move-in ready 3-level seaside year-round home or seasonal luxury getaway with almost 360 degrees of gorgeous ocean views, deeded water access, and boat mooring! Located in an established Egerton private community, this property offers 3 great bedrooms, bathrooms on each level, vaulted ceilings great room, a private family room, and office space with excellent internet, gorgeous landscaping and gardens, sunrise, sunset, cocktails, and coffee decks, outdoor private dining gazebo, 2 car detached heated garage with workshop, cedar lined garden shed... all this and more plus the fishing boat, 2 kayaks and ride on lawn mower can be included! Bonus... Melmerby and Big Island Beaches are close by too! This area is truly one of Nova Scotia's best-kept secrets because these opportunities are rare. MLS 202314229

 

27 Kingsmere Court, Timberlea

List Price $599,000

Close to the golfing, skating, cross country skiing and walking trail amenities in Brunello Estates plus St Margaret Bay beaches and boating, this beautiful large home huge fenced in property has been family owned since 1981. And the exceptional location is on a wonderful cul-de-sac in a great Timberlea neighbourhood! Perfect for growing families, this family home is bright and cheerful and includes an eat-in kitchen, separate dining room, large living room, spacious family room, 4 bedrooms, 2 full baths, lots of storage and an attached garage. 27 Kingsmere Court is also perfectly located at the top of the circle. The home and property have been exceptionally well cared for over the years with many recent updates. Pride of ownership, great curb appeal, amazing lifestyle and a happy home. Definitely a must see! Quick closing available. MLS 202323649

Halifax Mortgage Specialist Bruce Lusby 

(902) 210-0515

http://mortgageweb.ca/BruceLusby

Halifax, Nova Scotia - updated Oct 6, 2015

Variable:

5yr @ Prime - .65% (2.05%)

HELOC @ Prime +.25% (2.95%)

Fixed:
1yr 2.29%
2yr 2.09%
3yr 2.24%
4yr 2.54%
5yr 2.54%
6yr 3.39%
7yr 3.44%
10yr 3.84%

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