• top 8 reasons to refinance

    Top 8 Reasons To Refinance

    When discussing the top 8 reasons to refinance, it is important to keep in mind that good mortgages make good business.

    It was your very normal family with two sons. The couple worked very hard and played hard. The father specifically had an amazing appetite for the good things in life. He had the latest truck, snowmobiles and gadgets to go to their cottage almost every weekend. They funded their lifestyle by using equity in their home in the booming real estate market. The wife wanted to see her husband and kids be happy, but she also wanted to pay off her house. Unfortunately, this cycle happened two times. The dad ended up hurting his back and the salary came down, but the debt didn’t and they struggled.

    In the end they went their separate ways. The mom ended up with a mortgage and a good part of the debt. It was not good business, refinancing to live a lifestyle works until the equity or the income dries up.

    Now On To The Good Reasons

    Today at Robert Floris’ Mortgage Architects, we will discuss a simple concept. What are the good reasons to take out a mortgage and why it makes good business sense.

    One of the first things you should consider when thinking about the top 8 reasons to refinance is a simple concept. Is this good for myself and my family? The primary benefit should be the borrower and not the banker or mortgage broker. With this in mind, let’s review the top 8 reasons to refinance or getting a mortgage is positive and constitutes good business.

    1. Long-term forced savings. This may appear obvious but you have to live somewhere. Well over 20 to 30 years why not own the home instead of making the landlord wealthy.
    2. Investment reasons. This can be broken up in several ways: a. Productive reasons: buying a piece of machinery or a financial asset that can actually bring in extra cash is an excellent reason. b. Educational reasons. Nothing is better than investing in yourself. We have had countless stories of our clients borrowing money only to have outstanding careers and improve their financial situation.
    3. Renovations to upgrade home. The home is an investment and like a car, it requires upkeep. These can include a new roof, windows, electrical or plumbing to keep the home at its maximum value.
    4. Cash flow. This is a major reason in my professional opinion. Going back to the concept of will this improve your life, keeping more cash in paying out higher debt is something that is very common with businesses, corporations, governments and households. It just makes common sense.
    5. Marital dispute. It is reported that 50% of all unions end up splitting up. For many reasons including children and convenience, one spouse or common-law partner buys the other out.
    6. Lower payments with lower rates. This is not prevalent as it once was. In the 90s the rates were double digit. In 1989, the five year fixed rate was 11.75%. Today changing products is important especially if you are in a subprime mortgage or high rate second mortgage.
    7. Circumstances within the home change. This occurs frequently when for health reasons or job loss, your economic situation will change over a given period. This is where you want to lower your payments until you feel better or find new employment.
    8. Consolidate multiple mortgages. Many clients have mortgages with either attached secured lines of credit or second mortgages. If your situation dictates you can save money with one mortgage, then again it is positive.

    Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

    If you would like to apply for a mortgage online, please follow this link.

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