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www.oakvi Ilebeaver.com The Oakville Beaver, W ednesday N ovem ber 1, 2006 - 17 Thanks, Wilma N E Y /im is it time to refinance? Given today's competitive interest rates, this could be an excellent time to refinance your home. You will need to do a little analysis to make sure it is worth it. On the surface you need to compare the rates and determine legal costs, appraisal fees, discharge fees and payout penalties. Why Would You Do It? You typically would refinance if you have been in your home for a while and have built up equity. The reasons for requiring an equity take-out would be to pay off high interest debt, such as credit cards, consolidate debt to improve your monthly cash flow, or to renovate your home. The latter basically puts the money back into the home and further increases the value. This will help with future refinances. One of the best positions to be in is that you can qualify for a much lower Interest rate, you have a home that has significantly increased in value, and you are coming to the end of your current mortgage term. The end of term means there would be no payout penalty on a closed mortgage. If your current mortgage is open, then timing isn't an issue. How Do I Decide? The most obvious data you can visualize is to compare amortization schedules; one with the current mortgage balance, rate and payments and another with the new mortgage balance, rate and payments and another with the new mortgage amount including the equity take-out, the new rate, fees, penalties and payments. There are many ways to run amortization schedules, so take care to compare apples to apples. One method is to use the same payment amount for both scenarios. Then compare the savings and the end of a specified period. Even if you have to add in a significantly high penalty, a lower interest rate may more than offset it. If you are choosing to refinance in order to pay off high interest debt, then it's a simple matter of comparing your mortgage interest rate to the average interest rate of your debt. If monthly cash flow is the most important factor, then you will compare the increase in your new mortgage payment to the amount you pay for all the debts you will eliminate. Another factor to consider Is the effect of CMHC premiums. The best value you can receive is not to incur any new CMHC premiums when refinancing. This can be accomplished by keeping the Loan To Value (LTV) ratio to 75% or less. If you move up to 95% LTV, then the maximum premiums will be < added on to your new mortgage. In between 75% and 95%, the premiums are on a sliding scale. ASHLEY CAM ARA / SPECIAL TO THE BEAVER PAUL HARRIS FELLOWSHIP: On her last day as Oakville Beaver Living Editor, Wilma Blokhuis was presented with the Paul Harris Fellowship from Oakville's five Rotary Clubs. Behind Blokhuis are the five Oakville Rotary club presidents Susan Howard, Oakville North; Ashok Kochhar, Oakville Trafalgar; David Batchelor, Upper Oakville Centennial; Marie Hientzman, past president of Oakville West; and Judy Warrington, of Oakville Rotary Club. ) AT OUR REGULAR PRICE BUY 1 B a sic & F a sh io n Fab rics, D r a p e r y & U p h o ls te r y F abrics, S e w in g N o t io n s & m o re ! Purchase a Hi Efficiency Furnace and Receive a HERE'S HOW IT WORKS: Buy 1 full metre or unit of selected merchandise at Fabricland's regular price and get the next 2 metres or units FREE! Sale in effect October 23-November 5 on selected | merchandise while quantities last. Most items available in all stores. Look for the red sale tags. No special orders. 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