Mortgage Brokers Montreal

Why Refinance Your Mortgage in 2021?

COVID-19 has created an abrupt situation in the whole world. Many people have lost their jobs and others are living in a very low expense. There are a very few who earns and for those who are earning and have their own home, COVID-19 can provide an opportunity to reduce monthly housing costs through mortgaging. Here is a deep analysis on why you should mortgage in 2021 or take help from Mortgage brokers Montreal.

Mortgage refinancing It is the process where your need to break your old mortgage and start a new one. Here, you new mortgage will pay your old one and you can also borrow additional money.

Benefits 

Pay less interest and monthly payment

Since the global pandemic began, mortgage interest rates have drastically decreased to low level. If you refinance your mortgage now, you will surely lower the interest rate. This will indirectly lowers your monthly payment.

Through decreasing the interest rates, you can save an extra amount in this pandemic. 

Accessing equity

Refinancing Montreal the mortgage will access you equity in your home. You can use this equity value in different ways like paying off high-interest debt, home renovations and many more. Through refinancing the mortgage interest rates, you can access up to 80% of equity.



Stability

Refinancing Montreal can help you to gain stability. An increase in interest rates means you can save directly some amount of money which you can use to pressure off your finances, put away some extra cash for emergencies. It will help you to gain stability in this unreliable situation.

Drawbacks 

Prepayment penalties

Prepayment penalty is the cost you have to pay if you break the existing mortgage agreement and look for the new one. It will be either your three months' interest rate or interest rate differential (IRD) whichever is greater. It can be a significant amount of money ranging from thousand to ten thousand, depending on the amount of your mortgage. 

Extra costs

Along with prepayment penalties, you will need to pay some extra fees like mortgage discharge fee, legal fee, etc. These are not quite a big amount, still, be prepared for them. 

Qualification problems

This pandemic has resulted in the loss of earnings to many people. While taking a mortgage, or will be necessary to prove that you are able to pay the monthly interest. Your credit score, income and debt information will help a lot here. If you have lost your job or undergoing any financial crisis, you may not be able to secure a new mortgage for your house.

Conclusion Refinancing the mortgage will surely benefit you in the short as well as long run. Stepping ahead, you can take the help of your Mortgage brokers Montreal.