Is It Worth It To Break Your Mortgage Early?Admin
A mortgage advisor can come in handy, especially when you’re thinking about refinancing or breaking your mortgage. They can complete an analysis of your personal financial situation, including a review of your existing mortgage. In doing so they’ll be able to show you what costs you might face and outline all of the benefits that come with either option. They also have access to special lenders with competitive rates, and this is what will help you come out ahead if you decide you want to break your mortgage.
Be Aware of Hidden Costs
When you first got your bank mortgage loan, we’re sure you got an amazing rate. But with it, came some hidden fees and penalties, that were outlined in the terms and conditions of your mortgage agreement.
Banks know that a large majority of Canadian home buyers will usually break their mortgages early, this is why these extra fees and penalties exist. They wouldn’t be in the business of providing mortgages if they did not make a profit. This also happens to be the very reason why they are able to offer you a discounted rate, because it’s in their best interest, not yours.
A mortgage broker can help you to determine:
- The cost of breaking your mortgage before the end of your term
- If it’s worth it to break your mortgage early
Extra precaution needs to be taken before you make a definite decision to refinance, otherwise, it could cost you a lot more than you thought you would actually save in doing so.
Reasons Why Most Canadians Break Their Mortgages
The most common reason that 80 percent of Canadian homeowners break their mortgages is because they can save money and get a better rate by going with another mortgage solution or to access home equity. Here’s why they do so:
- Consolidate or eliminate high-interest debts
- Invest or purchase other properties
- Access funds for a home renovation
- Invest in their child’s college or university education
The Next Steps to Breaking Your Mortgage
Is it in your best interest to refinance? Speak to a mortgage professional who can:
- Analyze your mortgage and determine how much home equity you have available
- Review the terms and conditions of your mortgage with you and point out any hidden fees and penalties
- Prove the benefit in breaking your mortgage with accurate calculations
Consolidating your debts can help to reduce your interest amounts and help you achieve your financial goals.
Your mortgage terms will determine the actual value and benefit to you. To ensure you properly understand all of the financial terminologies speak to a qualified, experienced mortgage broker.