If you think a 12% annual return on your money is good, here's the first time insider secret on HOW TO set your sights on 23% from your mortgage.

What volume of debt are you carrying right now? If you are like most Canadians, you have debts that exceed your annual net income. Getting a handle on all of this debt can put a lot of strain on today’s households. Home mortgage refinancing is one possible solution to the debt load problem.

Where is All This Debt Coming From?

The rise in debt loads for Canadian families has been widely reported. According to Statistics Canada, the median debt load for Canadian households grew 38% between 1999 and 2005.

A lot of this increase is attributed to higher costs for home purchases and the need to take out a mortgage. But there are other expenses involved. Line of credit debt doubled in the same six-year period, while vehicle loans increased by over 40% and credit card debt jumped 58%.

Households have typically cut back on savings to finance some of their debt, a trend that has some economists worried. With no savings to fall back on and heavy debt loads, an increase in interest rates could be devastating. Most experts advise families with high debts relative to their income to put themselves on a budget, and start saving everywhere they can.

Can Home Mortgage Refinancing Help?

Home mortgage refinancing is not for everyone, but for many people it can make sense.

With home mortgage refinancing, you pay off your existing mortgage to switch to one with a lower rate. Cash-out refinancing enables you to borrow more than you currently owe on your mortgage, giving you some extra money for other expenses, like outstanding debts, home renovations, or university tuition.

There are costs associated with home mortgage refinancing so you should evaluate those closely before deciding to refinance. The fees are the same as the ones you paid for your original mortgage. Depending on the terms of your first mortgage, there might also be a fee for paying it off early.

Is home mortgage refinancing a good strategy? It depends a lot on interest rates, both current market rates and those charged on the debts you have. Refinancing might be the right decision if you want to:

• Save money on your mortgage. If your main concern is lowering your monthly mortgage payments, refinancing might be an option, depending on your circumstances. If you are planning on moving within the next 2-3 years, home mortgage refinancing would not be wise – you’ll be moving before you realize any savings from the lower rate. If you plan to stay, look for a difference of at least 2% between your current mortgage interest rate and the market rate. Typically, anything less than a 2% difference will not save you much. Refinancing to switch between a fixed and variable rate can also save you money.

• Pay off your mortgage sooner. Switching from a long-term to short-term mortgage helps you pay off more of the principal.

• Consolidate debts. Cash-out refinancing can provide you with a loan at a much lower interest rate than the rates charged on your outstanding debts. You can pay off your debts and save a significant amount in interest.

For advice on whether home mortgage refinancing is right for you, consult a mortgage professional.

Watch the video related to mortgage refinancing

A home equity loan means borrowing money from a bank against the equity that you currently have in your home. The equity is the value of your home minus the amount of the mortgage that you have.

Help answer the question about mortgage refinancing

Is it a bad idea to apply for a credit card while in the middle of a mortgage refinancing process?
I have a high credit score (760), and was approved for my bank's best rate. The refinancing process is taking awhile, and I would like to get a better rewards card than what I have. Would it be a bad idea to apply for a new credit card before the refinancing closes?

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Crystal Mate -
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For more information on home mortgage refinancing or renewing mortgages in Canada contact CanadianMortgagesInc.ca

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11 Comments »

1. 

   so basically they are helping people..

   Comment by Wordpress — September 21, 2010 @ 6:55 am

2. 

   You get your equity in exchange for a longer term in exchange for lower rates. Or something like that

   Comment by Lil — September 21, 2010 @ 7:04 am

3. 

   thanks mr refiadvisor

   Comment by WPMixer — September 21, 2010 @ 7:11 am

4. 

   If you are looking for the best mortgage refinancing site, try this site

   http://best-mortgage-refinancing.com/

   Here you can find the lowest interest rate in your area

   Comment by ramona rankins — September 21, 2010 @ 7:33 am

5. 

   A mod will take your existing loan and make changes to it it can lower your interest rate and your payment or just lower your payment the bank will take your financial information from you and then they will determine how much you can afford to pay a month then the mortgage company will make a decision based on the information they have got from you if they will do the mod but with the new obama plan they will give you a mod for 3 months to see if you can make the new payments is you can then you get the mod if you can't then you don't and the obama plan will give you a fixed interest rate instead of an adjustable one
   A refinance will give you a completely new loan so you could get a lower interest rate and a new payment but if you are behind in your current mortgage most banks will not touch your loan and you will have to try and get a modification

   Comment by Don — September 22, 2010 @ 5:00 pm

6. 

   Yes. The person on the title can block your attempt to refinance.

   You can wait to sell, but he will have the same veto power over any contract offer as well.

   Comment by Bewildered — September 22, 2010 @ 6:59 pm

7. 

   Be sure to refinance for the balance only. Check all your options. If you're score is good it may be better to do a "pick-a-pay" or pay option loan. You qualify at the 30 year rate but each month you have the option of paying 30-yr payment, 15-yr payment, minimum payment or interest only payment. The rate is lower than a regular fixed rate mortgage. Therefore, if you were having to make home or car repairs you can pay the minimum payment and still be on time for you monthly payment. You can also keep current mortgage and pay an extra payment once a year and it will cut the mortgage time in half.

   Comment by Alex C — September 22, 2010 @ 9:17 pm

8. 

   Any experience working in a bank (or mortgage company) is great experience for a life. To truly understand how the banking world works will equip you greatly into the future. ~ no matter how you start.

   The larger banks in the USA (and other parts of the world too) have experienced big drops in their market positions because of the over lending to sub prime market. Interestingly, some of the smaller banks are doing really well with stock rises as they did not get involved in this over lending practice.

   all the best to you ~ its' a great education no matter what

   Comment by Jake K — September 23, 2010 @ 3:03 pm

9. 

   If you are looking for the best mortgage refinancing site, try this site

   http://best-mortgage-refinancing.com/

   Here you can find the lowest interest rate in your area

   Comment by Anonymous — September 24, 2010 @ 3:16 am

10. 

    If you are looking for the best mortgage refinancing site, try this site

    http://best-mortgage-refinancing.com/

    Here you can find the lowest interest rate in your area

    Comment by kelsi frantz — September 24, 2010 @ 9:34 am

11. 

    If you are looking for the best mortgage refinancing site, try this site

    http://best-mortgage-refinancing.com/

    Here you can find the lowest interest rate in your area

    Comment by carmelia gibson — September 24, 2010 @ 5:32 pm

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