Month: September 2018

Know more about Refinancing Mortgage

Most of you are familiar with mortgages. It involves taking a loan with a property of yours being placed as mortgage which the lender would have the right to sell if you default on your loans. But what is ‘Refinancing Mortgage’? This financial device is fast gaining popularity and becoming common in Canada through Mississauga mortgage refinancing brokers. Let’s understand what this term basically means.

Introduction to Refinancing Mortgage

To put it in the simplest possible terms, refinancing mortgage means paying off a loan that you have taken by replacing it with a new one. On the face of it, it may seem like a ludicrous idea. What’s the point of paying off a loan by taking a new loan? But on closer inspection, it becomes clear what the advantages are of such a strategy.

By taking a loan from one agency to pay off another from a different one allows you to change the conditions of mortgage that you are working under. The new loan may have a lower interest rate, better terms of repayment and other benefits.

This is why many mortgage brokers in Mississauga have seen this opportunity and have produced schemes which allows borrowers to shift from adjustable rate mortgage (ARM) to fixed rate mortgage (FRM).

Precautions to Take While Refinancing A Mortgage

On the face of it, it may seem that refinancing is an unalloyed good for anyone struggling with his mortgage payments. However, on close inspection of Mississauga mortgage refinancing brokers’ terms, it becomes clear that there are risks associated with it also. Very often, making an immediate payment get rid of your existing loan comes with a fine or penalty. This clause if inserted in mortgage agreements by mortgage refinancing brokers Mississauga quite often.

Do make use of the services of an attorney along with Mississauga mortgage refinancing brokers to make sure that you are ending up getting a raw deal. Make sure the fine you are paying does not completely offset the benefits you are receiving due to the change of the terms. If you can be sure of this, refinancing your mortgage through mortgage refinancing brokers Mississauga is not a bad option.

Pre-Approved Mortgages for First-Time Home Buyers

If you are all set to apply for a mortgage loan for buying a new house, steady yourself! It isn’t always that easy. You first need to get a mortgage pre-approval for such a loan and that could prove to be a bit tricky.

So, what exactly is a mortgage pre-approval and how does one go about obtaining it? Let’s study this matter a little more closely. Pre-approval is a thorough analysis of your finances to understand whether you would be able to pay back your loans. Pre-approved mortgages Mississauga can be easily availed. In fact, due to its large housing market and steady economic growth, pre-approved mortgages in Mississauga are becoming increasingly common.

Getting a mortgage pre-approval involves providing the lender, who is going to give the approval, all the details regarding your financial status. This includes your credit history, credit score, debt-to-income ratio, assets, liabilities, history of your employment and the incomes you earned.

Based on these inputs, the lenders will draw up a report which will let you know whether you are worthy of receiving the loan or not. They will check how your finances would withstand the challenges that may occur, therefore, it’s also a bit like a stress test.

At the end of this process you will have a clear understanding of your capabilities when it comes to taking a loan. You will be made aware of the range and extent of loans you can take and successfully service. It will also give you an idea of the interest rates which are affordable for you. With this information availed, you can look for houses that are affordable and fall within your means.

Pre-approval for mortgage loans have an expiry date. Usually, they remain valid for 60-120 days as the finances of any individual may change in that period. After the expiration, you will need a new pre-approval to continue your search.

Mortgage pre-approval should not be confused with pre-qualification. Pre-qualification involves a lender skimming through the main details of your financial condition. As a result, pre-qualification merely gives a rough estimate of the loan and interest that you can afford. It is not a substitute for a pre-approval.

Contact Mississauga mortgage brokers, GT Mortgages to apply for pre-approved mortgages.