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Refinancing your house involves obtaining a new mortgage that will pay out your existing mortgage(s). The new mortage can be larger than the one that you have if you have other plans for the extra money.
Here are the 5 stellar reasons why refinancing your house can be a good decision for you.
1. Lower Your Interest Rate. In most cases, you are able to lower your interest rate by refinancing. That is, if you refinance with MortgageFlex. Your bank charges higher interest rates than we charge. The savings can show up in the form of lower mortgage payments, or lower interest costs, or both.
2. Debt Consolidation. If you have enough equity in your house, it can be a great advantage to you to refinance your house to pay off other debt that you currently have such as car loans, credit cards, and lines of credit. The effect of doing this is that you take credit card interest of maybe 18%, and car loan interest of maybe 8% or higher, and convert it into lower mortgage interest rate. You still owe the same amount, but your interest rate and payments are reduced.
3. Home Renovation. You can add value to your home by fixing it up. It could be a new garage, a new kitchen, or finishing the basement. The easiest way to get the money to do this is by refinancing your mortgage.
4. Tax Advantage. There are ways to structure your mortgage to minimize the amount of taxes that you pay. We can show you how to shave years off of your mortgage, without increasing your out of pocket mortgage payments. This all has to be done carefully though so that the CRA will accept it.
5. Investing. Your house is the one asset that will allow you to borrow at the lowest possible rate - even below the prime lending rate. With this in mind, there are many opportunities for investing that will generate a much higher return on investment that that interest that you have to pay. For example, you borrow $100,000 againt the equity in your house. You invest that money. The amount of money that you earn from that investing could be anywhere from 2% to 10% higher than what it costs you to borrow that money.
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