Mortgage Blog

Let's first understand Mortgage Refinance and Mortgage Renewals. In this article I have outlined the benefits and risks of Mortgage Refinance and Mortgage Renewals. Both are good in their way; it depends on what situations borrowers are in. 

Mortgage Renewals: - when the borrower renews existing loan deal that he/she got it at the beginning of the loan deal. For example, if borrower has 4 years of loan deal term and at end of the 4th year borrower goes to any financial institution to renew the loan deal without increasing principal mortgage, however, interest rate may change depending on the lender.  

Mortgage Refinance: - When the borrower at any time goes to any financial institution and looks for a better deal to replace the current deal. Compared to Mortgage Renewals, it can happen any time during loan term.  

Mortgage Refinance Benefits and Risks? 

Many times, it is better to refinance your mortgage than renewals for another terms. In refinancing, borrower can taking out separate loan to pay out current loan. This separate loan may have lower interest rate and shorter term that can allow to take out money from home equity. In addition, borrower can switch from fixed rates to adjustable rates.  

There are common reasons why mortgage Refinance is preferrable:  
1) To take out extra cash from equity of your home at lower interest rate. Prime rates are set by the central government bank. After that banks or private lenders set the rate according to them. If the borrower took out loan at higher interest rate at that time, then you can take this refinance loan to get lower rate that can help you to save money in interest.  

You can check out my article about Variable Rates vs Fixed rates. 

Mortgage refinance can also be used towards Debt consolidation. The most common debts are probably credit card debt and student debt. Interest rate for credit cards is around more than 23%. To get lower interest rate, debt consolidation is the best option. In debt consolidations, you can take one loan to pay out every debt you have with a low interest rate. You can read more about debt consolidation in our blog.  

Mortgage Renewal: -  

In Mortgage Renewal, whatever you borrow when you sign a deal that amount is going to be carried forward except interest rate. Interest rate is going to change up or down mostly depending on lender. Another way, you can go out in the market and check other financial institutions that offer lower interest rates and better mortgage terms. You can switch lender. Your loan term and interest rate may change depending on the lenders you select.  

If you have any questions about mortgage, then call Sarabjit or you can visit our website Centum United Mortgage 

If you are looking for any pre-construction homes or condos, then visit our website Own Ontario Home for latest project.