When is a good time to think about refinancing my mortgage? 6 months prior to needing the funds. This way the broker can determine if there are any issues and deal with them and get you a rate guarantee of 120 days. What is the maximum amount of equity I can access when refinancing? A borrower can access up to 80% of the appraised value of their property through an institutional lender. With a Private Mortgage Lender they can access usually up to 85% When Is Mortgage Refinancing Not a Good Idea? When the payments are not affordable or when the financing surpasses 80% of the value of the property. Is having a real estate lawyer necessary when refinancing a mortgage? Yes, a lawyer is normally required to advise, educate and protect the borrower in this transaction
Mortgage Refinance Ontario
Refinancing is the process that pays the existing mortgage and/or any other legal claims against the property and sets up a completely new mortgage(s). There are many reasons as to why you should consider refinancing your mortgage:
Consolidate debts:
If your monthly bills have gotten out of control, you might be able to refinance your home and pay them off. The advantage of doing this is to lower your total monthly payments. You should have a mortgage agent review your situation and make a recommendation.
Refinance a First & Second Mortgage into a new First:
If you have two mortgages on the same property, you can combine them into a new first mortgage, as long as the total amount does not exceed 90% of the value of the property. If the new mortgage is over 75% of the value of the property, normal CMHC/SAGEN premiums and guidelines apply, and one thing to remember here is that only outstanding amounts can be combined – any discharge penalties and costs must be paid separately at closing (please note that we have cash-back programs to help with these penalties).
Financing a Renovation:
If you are doing major renovations (spending over $15,000), it could be less painful monthly with a mortgage as opposed to a loan or line of credit.
Financing the purchase of other investments:
You can use the equity in your home to finance the purchase of investments and also benefit from the lower carrying costs of a secured line of credit or mortgage and also write off the interest costs against the taxable income.
Financing the purchase of investment property:
If you have the equity and have a desire to be a landlord, you could take equity out of your property by refinancing the mortgage to use towards the purchase of an investment property. This is also called leveraging of your assets.
Financing children’s education:
The best thing we can do for our children is be good role models to them, teach them to be responsible citizens, and give them a good base with a good education. With the high cost of many things nowadays, as well as education, it is sometimes difficult to have that kind of money in the bank, but you may have it in the form of equity in your home. Education is something they will never lose. To refinance your mortgage today to your advantage, simply APPLY ONLINE NOW with no obligation whatsoever.
Closing Costs Related to Refinancing:
The regular costs related to the refinancing process are an appraisal, legal fees & disbursements, title insurance if a survey is not available, CMHC/SAGEN Premium if the mortgage is high-ratio (this cost can be added to the mortgage), PST when CMHC/SAGEN premium is required, and any discharge penalties. You should review your mortgage regularly and keep up with new products and offers that are available – they may save you a bundle. When you break your mortgage contract to renew your mortgage at a new rate and a new term, you are faced with a prepayment charge to reimburse your financial institution for the lost interest income. Typically, this prepayment charge is based on the greater amount of either 3 months of interest or the interest rate differential (IRD).
Early Renewal
If the current rates are lower than the rate you have and you are considering Early Renewal, compare the prepayment charge against the savings by having the lower rate. If you believe that interest rates will be higher at your existing renewal date, you can renew early to protect yourself from higher rates. One thing to remember if you decide to early renew is the prepayment charge will have to be paid upfront. If there is room, you can add it to your mortgage, but you will have to go through a lawyer to redo the mortgage, and this cost should be considered when deciding which way to go. Some financial institutions will blend both rates for the new term. Remember that Northwood Mortgage in Ontario has CASH-BACK programs that could pay for your prepayment charge. The savings in some situations run into the thousands of dollars. Re-examine your mortgage from time to time, and at least once a year. Thousands of dollars could be saved.
Switching / Renewing
When the mortgage is about to mature, most lenders will mail out their renewal agreements around 30 days prior. Northwood Mortgage in Ontario can guarantee your rates up to 120 days (4 months) before your mortgage comes due, and this service is free and with no obligations. When your mortgage is due for renewal, it’s a great opportunity to make sure that you’ve got the right mortgage for your present needs. It is also a great opportunity at this time to consider paying down your mortgage or changing to a more frequent payment method, such as bi-weekly or weekly. Speak to one of our agents, they can suggest even more options to suit your needs.
