The Pros and Cons of Refinancing Your Mortgage During the Pandemic

Given the unusual and unprecedented circumstances of Covid-19, many Canadians are facing financial difficulties. Although certain measures have imposed to ensure safety and assurance for Canadians, this has not served as enough to fuel the expenses of the cost of living for many residents. In fact, it was found that hundreds of thousands of Canadian households will not be able to pay their mortgages by agreement with their lender in the next 12 months. In turn, many citizens are having to refinance their mortgages before the worst case, opting to sell.

Considering the circumstances of the pandemic, there are certain pros and cons to consider when refinancing one’s mortgage. You may choose to refinance your mortgage to receive a lower rate, access equity in your property, or consolidate your debts. Such, for example, with high equity, you may be able to access the built-up equity in your home to pay-out high-interest debt through a mortgage refinance. Outstanding debts such as lines of credit, credit card bills, car loans, and more, may be able to help you consolidate these debts through the various mortgage refinancing options available to you. These serve as benefits in saving money and preserving better deals in light of the pandemic, however, there are also certain disadvantages to consider as well.  Although there are clear benefits, higher penalties, removing the incentive to pay the mortgage down faster, and more debt may equally incur when breaking your mortgage. Thus, weighing the advantages and disadvantages of this process is in your best interest when it comes to the refinancing of your mortgage.

Given the circumstances of the pandemic, Canadian banks are also tailoring their plans to the needs of their customers given that many are in financial ruin. Many banks are more flexibly and compliantly handling their offerings subject to a mortgage, refinancing, and payments. With the rise of Covid-19 cases, this will be of help to many citizens in ensuring that citizens are void of the consequences of unemployment. Too, it prevents Canadians from resorting to selling a property during these particularly difficult and unprecedented times, guaranteeing relief to citizens and helping them support themselves.

In all, a mortgage refinance is a major financial decision that should never be made lightly, especially during these difficult times. With a variety of options available to you, it has the potential to allow you to receive a lower rate, access equity in your property, or consolidate your debts. However, many short terms and long-term risks and disadvantages can equally incur, such as higher penalties, removing the incentive to pay the mortgage down faster, and more debt when it comes to the decision of refinancing your mortgage. With these advantages and disadvantages to consider, it is within your best interest to receive professional legal help flow through the mortgage refinance process once you’ve decided the plan that best fits your needs. For more, contact Buzaker Law Firm via telephone at (905) 370-0484 or via email at info@vblegal.ca.

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About Buzaker Law Firm

Buzaker Law Firm strives to provide high-quality legal services with integrity, professionalism, and respect for our clients and the community. Our law firm focuses on ethics while solving and negotiating any situation with significant knowledge and skills gained through years of practicing law in Toronto, Ontario.

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