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Ghummaz Bhatti

Debunking Popular Mortgage Refinancing Misconceptions

Interest rates have never been as low as they are nowadays. It’s no surprise that most, if not all, mortgage holders out there have started looking to get refinancing done. Typically, the best way is to go about reaching out to a mortgage specialist in Ottawa. 

There are several plans and multiple lenders to choose from. Before anything else, however, it’s key to be fully aware of nothing but the facts. That way, you can make informed decisions that will lead to the best mortgage refinance rates.

MYTH: Monthly mortgage costs are lowered through refinancing.

FACT: There are several reasons why someone would opt for refinancing their mortgages. This can include what kind of loan is in question, as well as the need to change existing loan terms in the first place. Sometimes, long-term loans need to be converted so that their duration is much shorter. 

In those cases, the costs in a month are higher. What happens is that when the maturity period is shorter for any loan like a mortgage, interest costs over the entire tenure can be an area for savings to be made. Adjustable vs. fixed interest rates have monthly costs that can vary. The payout for those is basically varied from case to case.

MYTH: Refinancing is done in order to get a better deal.

FACT: Multiple factors could lead someone to choose mortgage refinancing. To make sure that it’s the right step to take, a good starting point is to look at the benefits in comparison to what it would cost. Explore the probable scenarios, even the ones that may seem a little outlandish. This is particularly crucial in cases when the living duration is yet unknown, since refinancing costs involve closing fees. Should the house in question be intended for a short time only, then the projected savings from refinancing may not end up covering the full cost down the line. 

MYTH: The best choice is always fixed-rate mortgages.

FACT: No, not at all. Experts have been known to give out predictions as to interest rates and their possible directions. However, it needs to be emphasized that there’s no actual way to be fully sure of these. Given how vast the world is, anything could happen at some point at a certain place that will hold economic impact. Not to mention the numerous possible factors on the macroeconomic level. When trying to decide between adjustable rates or fixed ones, it’s crucial to know their differences. A good rule of thumb, ultimately, is to consult with a reputable advisor that has clear expertise.

Conclusion

Mortgage refinancing has been on the rise again because of the record-breaking lows that interest rates have hit these days. Given how popular mortgage refinancing has become, it’s unavoidable that some myths have become quite common. Some of these include fixed-rate mortgages being the best, refinancing as a way to get a better deal, and lowered monthly mortgage rates. Now that you know the truth behind these misconceptions, talk to a trusted agent to discuss your refinancing options.

Searching Ottawa for mortgage services you can trust? Contact Ottawa Mortgage Services today. We value transparency, honesty, and integrity in the services we offer, from refinancing and debt consolidation to pre-approval letters and services for first-time home buyers.

Contact Ottawa Mortgage Services to learn more

funding@ottawamortgageservices.ca

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