Why Refinance Your Home?

December 22, 2008  
Filed under Refinancing

There are many reasons that people refinance their homes in Calgary. Sometimes they need cash to renovate their kitchen, or maybe they need to consolidate credit card debt. Whatever the reason, your mortgage broker is ready to help you with your refinancing needs.

Some of the reasons someone might want to refinance are:

Lower interest rate: Right now, interest rates are the lowest they’ve been in years. If your current mortgage rate is higher and you want to take advantage of the interest savings you’d obtain by refinancing your mortgage at the lower interest rate, now is the time to do so.

Pay for something: Many Calgary homeowners have built up equity in their home that is just sitting there. If you have decided to do some renovations on your home or would like to pay for your child’s education, you can refinance to access your hard-earned home equity.

Consolidate debt: Most people, at one point or another, have experienced what it’s like to have a bit of credit card debt racked up, and it’s not fun at an 18.5% interest rate. If you have equity in your Calgary home, you can refinance to pay off your credit card debt, and work it into your mortgage and monthly mortgage payments. That way, you can manage the repayment of your debt and pay a way lower interest rate. This also applies to any other loans you might have.

Do the Smith Maneuver: If administered properly, you can make your mortgage tax deductible. This is called the Smith Maneuver. For all intents and purposes, you borrow against the equity in your home to build an investment portfolio and write off the interest incurred from borrowing to invest. If you’re interested in The Smith Manoeuvre, you should speak to your mortgage broker and your financial planner.

This list is not exhaustive, since there are many other reasons that someone might want to refinance their home. One thing to keep in mind is that you must have a good credit score, income, own your own home, and any other qualification requirements in order to qualify to refinance. Have questions? Send us an email.


2 Responses to “Why Refinance Your Home?”

  1. Breaking Your Calgary Mortgage | HomeMortgagesCalgary.ca on April 9th, 2009 2:55 am

    [...] charging the IRD as opposed to the three months’ interest penalty. If you’re looking to refinance your home to save some money interest-wise, it’s important to ensure that the interest savings outweigh [...]

  2. Vacation Properties and Second Homes | HomeMortgagesCalgary.ca on July 13th, 2010 10:29 am

    [...] in your primary home. If you don’t have a large first mortgage, it may be beneficial to refinance your current mortgage or obtain a Home Equity Line of Credit in second place and use the funds to [...]

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