Should I refinance my home?
If you purchased your home more than two years ago or your house was a new-build and one of the following scenarios applies to you, you may be a great candidate for refinancing your home.
- Have high-interest debt
- Would like to lower your monthly bills
- Want a better interest rate
- Want to access cash for any reason at all – Personal reasons, renovations, investments, emergency fund, or to purchase another property.
- Want to remove somebody off your mortgage and title. Spouse/divorce, Co-signer, or anybody else.
- Coming up for renewal
Most of the money that Canadians have is in their home, refinancing allows you to access it at a cost-effective price. You can access up to 80% of the value of your home by refinancing and this allows you to achieve your financial goals much faster. Whether you’re looking to refinance your home to pay off your high-interest debts or looking to access equity to invest in your home or elsewhere, refinancing may save you thousands of dollars or provide you with an excellent return on your investment.
Refinance to consolidate debts and take out equity
The example below outlines how a real client refinanced his property to consolidate debts. This saved him thousands of dollars in interest, reduced his monthly bills by more than $2,500.00, and he was able to put more than $40,000.00 into his emergency fund.
Refinance to take out equity.
Refinancing your home can be an excellent way to fund a major renovation, purchase a second property, purchase a rental property, or simply access your cash.
This is an example of refinancing to access equity.
Value of your home: $600,000.00 refinanced at 80% loan-to-value.
Total Mortgage: $480,000.00
Pay off existing mortgage: $300,000.00
Approximate Lawyer Cost: $1,000.00
Approximate cash paid to you: $179,000.00
Monthly Payment: This will be based on your credit and overall application.
There are many different reasons to refinance your property so we couldn’t include
every scenario in this post. If you think that you may benefit from refinancing and would like
some additional information, please contact us now.
Should I work with a Mortgage Broker?
In the past, when there were a few options available, most people walked into their local bank to arrange a mortgage. They called their bank, scheduled an appointment, and brought their paperwork to the representative at the branch. The service that they received often wasn’t the best nor was the interest rate. The bank only offered them one type of product and interest rate and took a significant amount of time to even put an offer together. Due to how time-consuming the entire process was, most people just went through with it and didn’t visit another bank for a second opinion. There was a significant need in the market for better options and mortgage brokering as an industry took off.
When working with an established Mortgage Broker in Canada, you have access to more than 65 lenders with a wide variety of mortgage products. These lenders include large Canadian banks such as TD and Scotia but also countless other major lenders. Each lender has a few different mortgage products available, and a good Mortgage Broker will create a solution based on your needs and financial institution. With one application, you will have access to a wide variety of options and your Mortgage Broker will shop the market for you-saving you time and money.
Having access to many lenders and more mortgage options is great but one of the main reasons that people turn to Mortgage Brokers is service! Have you tried calling your bank lately? Were you able to get through to anybody? The answer is usually “no”. Purchasing a house is usually the biggest purchase any of us will make so being able to reach your mortgage professional is extremely important. The real estate market moves very quick, so it is imperative to work with somebody who is always available to you when you need them. The same logic also applies for refinancing. Your representative at the bank opens chequing accounts, credit cards, overdraft, RRSPs, and a wide range of products. They must know a little bit about a lot of different products which means that they cannot be an expert in any given field. If you were going to be flying to another country or city, who would you trust to get you to your destination? A part-time pilot that is also a hairstylist, bartender, and mechanic (Your bank rep) or a full-time airline pilot with years of flying experience (Mortgage Broker)? You may apply the same logic to securing your mortgage. I think the answer is clear.