“Get All The Benefits of Mortgage Refinancing When You Take Advantage of My Proven Process For Determining The Best Mortgage Options For Your Particular Situation”

To start off with, the basic definition of a mortgage refinancing or refinance mortgage is to have your existing mortgage re-written for a specific reason. Effectively you end up with a new mortgage out of the old one with potentially different rates, terms, and even amortization.

The specific reasons can include lowering your interest rate, changing certain terms of the mortgage, even the amortization period, securing additional funds for expenditure or investment, or gaining additional funds to consolidate other debts.

The most common reason for refinancing an existing mortgage is to gain access to additional funds for some particular purpose. Some mortgage programs can be specific to the use of the additional funds, but this has become less and less of a requirement over the last few years.

Even more specifically, the purposes for new funds can include:

• Consolidation of existing bills.
• Funds for home furnishing, renovations, and repairs

• Bringing your existing mortgage and property taxes up to date to avoid foreclosure.

Mortgage refinancing can also be utilized to secure lower interest rates without requiring any additional use of financing. Typically this occurs when interest rates drop and it becomes favorable to refinance an existing loan term to take advantage of the lower rates. Getting out of a higher rate interest term will likely cost you some money, but if you stay with the same mortgage provider, the refinancing process typically will blend your existing rate term with the new rate term to come up with an new lower cost interest rate where you’re not out of pocket.

But for the most part, mortgage refinancing involves what we call cash out mortgage refinancing where you’re using the available equity in your home to gain access to additional funds that can be used for a multitude of purposes.

The most common and most powerful application of a cash out mortgage refinancing is to consolidate higher cost consumer debt into lower cost mortgage products.

If consumer debt starts to get a bit out of control and is negatively impacting your monthly cash flow, refinancing your mortgage is an excellent solution to consider. With interest rates on credit cards in the high teens, a mortgage refinance can not only drop your interest rate by more than half, but it also affords you a longer period for paying back the debt and allowing your cash flow to recover in the process.

Even CMHC (Canada Mortgage And Housing Corporation) is now more flexible when providing insured mortgages for the purposes of refinancing. Traditionally, the CMHC would only allow additional funds or new money to be utilized for debt consolidation, but that has recently changed and now you can get a CMHC insured mortgage for up to 90% of the property value for refinanced mortgages and apply additional funds directly to debt reduction whether that is credit cards, other mortgages, or consumer loans.

Regardless of your intended use, a mortgage refinancing can provide you with lower cost capital which is effectively drawn against the equity in your house.

So whether you’re planning to take a trip or remodel the basement or put your kids through university, refinancing your mortgage is definitely an approach worth considering.

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