Homeowners have access to flexible and affordable Mortgage Refinance options allowing you access to equity in your existing home and consequently aid in achieving your financial goals.
If you have an existing mortgage and you would like to access some of your unused equity; that is a mortgage refinance.
There are a couple of ways to go about accessing your equity. You can look at paying out your first mortgage and arranging a whole new first mortgage for a higher amount. This may involve a payout penalty from your existing mortgage lender. Or, you can leave your first mortgage as is, and look at a 2nd place line of credit, or 2nd place mortgage. This way you avoid a payout penalty from your existing lender. If you are thinking of paying our your existing mortgage, the first thing you should do is contact your existing lender to see what they will charge you to break your existing term. Next step is contact your favorite mortgage professional to come up with the perfect mortgage solution.
Frequently asked questions:
What will it cost to refinance my mortgage?
The biggest one is probably the payout penalty from your existing lender. This amount can be added to your new mortgage amount, or you can pay it out of pocket. The other costs associated with arranging the new mortgage are; legal fees to have the paperwork changed and an appraisal fee to confirm the value of your property. The legal fees can be deducted from your refinance proceeds, but the appraisal cost will likely have to come out of pocket.
Estimate of costs:
- Legal fees - $390- $600
- Appraisal fee - $225- $350
- Admin or discharge fees from existing lender - $250
How much of my house value can I borrow?
In Canada, the highest you can borrow up to is 95% of your house value. Keep in mind, anytime you borrow more than 80% of the value, you will have to pay an insurance premium. There is a little trick to how much high ratio insurance you will have to pay. If your mortgage was originally insured, you might not have to pay a premium on those already insured funds (some conditions apply). For example, Blake bought his home in 2001 and he had an original mortgage amount of $200,000. He has paid his mortgage down to $100,000 but now he needs another $150,000. He may only have to pay an insurance premium on the new funds of $50,000 as the amount of $200,000 has already been insured. This is only the case if your new mortgage is insured
Being smart with your money just makes sense. Quickfire Mortgage Solutions trusted Mortgage Advisors will help you decide whether it is the right time for you to refinance. The decision to refinance should be carefully evaluated to avoid any complications at a later stage. By carefully studying the status of your current mortgage and comparing it to your income and other debts, we help you pick the refinance solution that best suits your current financial needs.
There are many reasons why you might be thinking of refinancing your mortgage.
- Help obtain a lower fixed rate : The interest on a fixed rate mortgage that you took several years ago may have dropped drastically. Refinancing the existing mortgage will entitle you to a reduced interest rate. This can save you money and increase your monthly cash flow.
- Investments : You can refinance your existing mortgage and use these funds to purchase an investment. This can be an excellent vehicle for your mortgage interest to be tax deductible in certain circumstances.
- Convert an Adjustable Rate Mortgage into a Fixed Rate Mortgage : The interest rates on an adjustable rate mortgage (ARM) might be low initially, but the fluctuations are unpredictable. Some people find these constant variations in the interest rate concerning and prefer to refinance the mortgage into a secure fixed rate.
- Consolidating multiple mortgages into one : Making your finances simple and easy to budget is important for most individuals. The best solution in this case is to consolidate multiple mortgages into one, with a fixed monthly interest rate and a longer repayment duration.
- Pay off other debts : The proceeds from your refinanced mortgage can be used to pay off credit card bills and other similar expenses. This potentially can end up saving a considerable amount of money and free up your cash flow.
- Make cash provisions for emergency situations : You can refinance your existing mortgage to free a larger amount of cash, depending on your home equity. Since a mortgage is a secured loan, the interest applied is considerably lower than that of an unsecured loan.
Quickfire Mortgage Solutions offers some of the lowest and most competitive mortgage refinance rates in the market. Regardless of your requirements, whether it is to consolidate existing mortgages or obtain a better rate, we get you the best deal possible. Our experienced Mortgage Advisors, who have extensive knowledge of the mortgage industry, will provide the necessary guidance that you need in making the right refinance decision.