Mortgage re-financing

[justtryingmybest]

Just looking for advice on who best to get advice from in regards to refinancing my mortgage. I'm with a bank, 5 year locked in rate of 3.84 nearly two years left, and am considering re-financing to take advantage of the lower rates. Should I call the bank I'm with to discuss their rates or a broker? Would a broker be willing to help me even though I have such a long period left on my existing mortgage? Thanks in advance for the advice.

[Zonny]

Just looking for advice on who best to get advice from in regards to refinancing my mortgage. I'm with a bank, 5 year locked in rate of 3.84 nearly two years left, and am considering re-financing to take advantage of the lower rates. Should I call the bank I'm with to discuss their rates or a broker? Would a broker be willing to help me even though I have such a long period left on my existing mortgage? Thanks in advance for the advice.

A broker will certainly talk to you about it, but there's likely big fees to get out of your locked in rate. We've used a broker several times, she always gets us a better rate than what our bank will do for us.

[caiclow]

Personally I'd go with a broker - they're always going to try to get you the best rate. We've used brokers repeatedly and always with absolutely great results. A broker will likely look into the refinancing issue for you but you have to take a good look at what your terms are to break your contract - if it's too much it's not necessarily worthwhile. But either way, brokers are the way to go. Good luck!

[chillys-willy]

Brokers are great. They receive payment from the bank that you go with as commission so you don't even pay them. I have had great luck with them. That said, I refinanced about the same point in my mortgage within the bank I was with, ING Direct. I went to variable 5 year from fixed and went down to 2.3% which I have been at for a few years now. I always looked at the payoff. I paid $850 to get out of the mortgage choice I was previously in but went down 3.1%. That meant it took 8 months to pay off the $850 before I started seeing a payoff for going with the variable rate. There is some risk to this choice but in my case it has paid off substantially. For a $100,000 mortgage, I save $3,100 a year. Better known as a vacation

[MortgageMaster]

The mortgage rules changed over the past year and refinancing took a hit. You can only refinance up to 80% of the value of the property. As CMHC will not insure these loans now, individual lenders have different criteria. Some will require you to pay to have them insured between 75-80%. Sometimes the lowest rate on paper is not always to your advantage.

This is why you will need to have your numbers crunched to see what the net benefit is to you.

It is possible to give you an estimate on what it would cost you to break the mortage. however some lenders use their posted rate to calculate it and others their discounted. The best thing to do to give you an accurate amount is to call your mortgage company (your year end statement will have a customer service call number) and ask what your payout would be the day you call. They can calculate in a minute or less. That will be a start. You would also have closing costs - lawyers fees, discharge fees etc. As it is a refinance you may be required to have an appraisal done to find out the value of your property by an independent person. The 80% would be calculated on this.

One company yesterday came out with a deal where they will pay the refinancing bill if the mortgage is 75% loan to value or less. That would save you probably $750-$1000 and their interest rate is below 3.00%.

Don't move ahead without researching a little. Find out what your remaining principal balance is and what the mortgage breaking fee or penalty will be be. Then you can make a decision on whether to refinance or not.

[justtryingmybest]

Thanks everyone for the replies. Found out the cost to get out of this mortgage would be $5500. I'm thinking re-financing doesn't make much sense!

[Rowan Nail]

I think a broker might help you by giving you options and it's up to you to decide the best one but make sure you will not fall into trouble again.

[justtryingmybest]

I think a broker might help you by giving you options and it's up to you to decide the best one but make sure you will not fall into trouble again.

Thanks for the reply. I'm not sure what you mean by 'fall into trouble again'. I'd like to re-finance to do some upgrades on the home while taking advantage of the lower interest rates.

[MortgageMaster]

Thanks for the reply. I'm not sure what you mean by 'fall into trouble again'. I'd like to re-finance to do some upgrades on the home while taking advantage of the lower interest rates.

You might want to talk to your bank and tell them you wanted to increase your mortgage amount to do upgrades. Get estimates so that you have written quotes to take with you. They may not go for a do-it-yourself scenario. Ask them if it is possible to do an increase and blend at this point. They would give you the new added amount at a lower rate and then blend the two in to give you a lower payment.

They may say no but it would not hurt to ask.