Refinancing your existing mortgage means that you are either wanting to change your current mortgage amount or change the remaining amortization left on your mortgage. You are able to refinance with a new mortgage up to 80% of the value of your home. You will need to qualify for the new mortgage under today’s qualifying guidelines.
In today’s economy, refinancing your current mortgage can be an excellent solution for a large variety of reasons:
Improving cash flow. For any borrowers feeling a bit tight on cash and living month to month on their current bills, it may make sense to refinance your home to consolidate accumulated debt, or to stretch the mortgage back to 25 or 30 years to lower the monthly payment. If current interest rates are lower than your interest rate, this is a great opportunity for interest savings. Full feature mortgages will have prepayment allowances should you wish to make extra payments on your new mortgage in the future, these mortgages will also allow you to increase your mortgage payment back up throughout the term once you feel ready.
Renovating your home. Whether you are wanting to build that new kitchen or bathroom you’ve always dreamt of, or whether it is to finally finish that basement suite so you can rent it out, there are many options and products available to you. Maybe you would like to add a HELOC to the new mortgage where you only pay interest on what you use, and can pay it off as quickly as you would like with no penalty, or we could add the amount of money needed for the renovation into your new low interest mortgage.
Buying a vacation home, investment property, vehicle, or a higher yielding investment. The equity in your home could help you obtain the down payment you would need on a new purchase, or save you money by receiving a very low interest rate on a loan instead of turning to a high interest consumer loan or credit cards. If it makes sense in your current situation, redirecting unused equity in your home towards higher yielding investments can be a great strategy to finance your future.
Supporting your family. Using the equity in your home can be an excellent way of helping family. Whether it is helping an ageing parent or grandparent with care, a child with their schooling or life event, or even to help your grown children with a down payment to purchase a home of their own.
Consolidating higher interest debt. If you are managing multiple higher interest debts such as credit cards, lines of credit, or vehicle loans, it can make sense to consolidate these balances into your new mortgage for one simple low interest payment. This would significantly improve your cash flow each month, plus you will pay off this debt much sooner as more of each payment goes toward the principal amount of the loan, which means giving less money away in interest!
Refinancing your home in most cases means you will need to pay a penalty to break your current mortgage. I will run the numbers to determine if a refinance is right for you, I will let you know the savings or cost to do so.
A refinance may also require a new appraisal to determine the current market value of your home, and it will require legal fees as changes to the mortgage amount or remaining amortization will require changes to the title of your home.
I am here to help you from the first call all the way to the conveyancing and closing of your mortgage, I will ensure your refinance is a smooth and happy one!
Please reach out today for your free consultation, or get started on a secure mortgage application with the click of a button.
Let’s get you one step closer to your new mortgage funds!