Oh, the joys of being a homeowner. You finally get that great fixed-rate 30-year mortgage at 8.5% and 2 years later…Interest rates plummet. Mortgages are now going for 5.25% and suddenly your 8.5% rate doesn't look so good.
While the above may look to be an open and closed case of " do it or you're nuts not to" it is not necessarily that easy. There is a great deal of good print, traps, hidden costs along with the mortgage itself.
Sometimes refinancing makes sense and at times it may blow up in your face if you are not careful. When refinancing your mortgage you essentially have two choices. In virtually all circumstances the variable rate mortgage you'll be able to get at any given time will probably be lower than the fixed-rate mortgage you'll be able to get at the same point in time. For a trusted refinancing lawyer in Vaughan, you can have word with your friends who had a deal with refinancing before.
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Your 5.25% speed could go until the 8.5percent rate you had when you got your mortgage. Add to this the fact that you are currently paying your mortgage out over a longer period, because refinancing sets your beginning back to zero, you wind up paying additional money in the long term.
Then you will find the traps you need to be on the lookout for. One departs and deferred establishment charges. That is a set sum equal to many months a percentage of their initial amount borrowed should you pay the load out premature.