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Refinancing a Mortgage

 Why People Refinance  Mortgages

  • Consolidate higher-interest debt and/or payout loans to improve monthly cash flow.

 

  • Pay taxes that are owing​

  • Finance home improvements

  • Purchase investment property

  • Get a better interest rate.

  • Provide a family member with gifted funds for their mortgage down payment.

  • Setup a home equity line of credit

  • General financial restructuring 

Image by Vadim Bogulov

Types of Mortgage Refinancing Products

  1. Mortgage Products in1st or 2nd Position

  2. Home Equity Line of Credit

  3. Reverse Mortgages

  4. Equity Products

How it Works:

You are essentially replacing your existing mortgage with a new one when you are refinancing a mortgage in 1st position. The new mortgage may have a higher balance (than the old one) if you are looking to borrow extra funds for any of the reasons mentioned above. The home equity you can access is traditionally limited to 80% of the property value. Refinancing your home will generally trigger mortgage penalties if you refinance before the end of your term. You will also be required to accept the market's current mortgage rates, which might not be ideal if you're already locked into a lower rate. In situations like these, we look at 2nd mortgage options to access the property's equity without disturbing the 1st mortgage.

There are costs associated with refinancing a mortgage beyond a pre-payment penalty to the existing lender, which can include, at minimum legal and registration, and discharge fees and we will outline these to you so that you know what will apply in your situation.

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