While refinancing a mortgage!

Most of the borrowers go with the option to refinance. Here are a few considerations to think about before applying for a home refinance:

1. Home Equity: Refinancing with little or no equity is not always possible with conventional lenders, but some government programs are available.

2. Credit score: Lenders have tightened their standards for loan approvals in recent years, so some consumers may be surprised that even with good credit they will not always qualify for the lowest interest rates.

3. Debt-to-Income Ratio: If you already have a mortgage loan, you may assume that you can easily get a new one. But lenders have not only raised the bar for credit scores, they have also become stricter with debt-to-income ratios.

4. Refinance cost: A home refinance usually costs between 3% and 5% of the loan amount, but borrowers can find several ways to reduce the costs or wrap them into the loan.

5. Rates vs. Term: While many borrowers focus on the interest rate, it is important to establish your goals when refinancing to determine which mortgage product meets your needs. If your goal is to reduce your monthly payments as much as possible, you will want a loan with the lowest interest rate for the longest term

If you want to pay less interest over the length of the loan, look for the lowest interest rate at the shortest term.

There are a number of professionals offering mortgage refinancing in Ontario . Consult two or three and choose the best among them.