Mortgage Refinance Red Deer

mortgage refinance red deer

Mortgage Refinance Red Deer

Mortgage refinancing can be an excellent option for some homeowners. By refinancing your mortgage you can reduce the cost of your mortgage payments if interest rates have dropped or switch from an adjustable to a fixed rate mortgage if interest rates are rising. This allows you to adjust your mortgage to better take advantage of the current rates, saving you money. When you refinance your mortgage you replace your existing mortgage with a new mortgage that has more favourable rates or terms and allows you to adjust your mortgage to fit your evolving financial needs. It is also a way that homeowners can pay off other debts besides their mortgage, helping them save money on interest rates overall by using the money from their mortgage refinancing (which offers a low interest rate) to pay off other debts such as credit cards that are charged a high interest rate.

There are two types of mortgage refinancing: One that aims to reduce your mortgage rate and one that aims to reduce your mortgage rate and give you money to pay off other debts. They work like this:

  1. Robert has a $200,000 mortgage with Lender A at an interest rate of 7%. However, he has recently learned that Lender B will let him obtain a $200,000 mortgage at a 5% interest rate. In order to switch from Lender A to Lender B he borrows $200,000 from Lender B and uses that money to pay off Lender A. Since he has now paid Lender A in full he has no more financial obligations to them and instead pays Lender B.

  2. Mary has a $200,000 mortgage with Lender A at an interest rate of 7% as well as $20,000 in credit card bills. She learns that she can get a $220,000 mortgage from Lender B with an interest rate of 5%. She takes out a loan for $220,000 with Lender B and uses $200,000 to pay off Lender A and $20,000 to pay of her credit card debts. Since both Lender A and the credit card company have been paid in full she no longer has any financial obligations to them and now pays Lender B.

For more information about mortgage refinancing, or to book a consultation and find out if this option is right for you, contact Pierik Financial today at (403) 588-8657 and visit www.wehaveamortgageforthat.ca.

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