Refinancing Your Home
The Canadian marketplace has been blessed, for the most part, with increased home values over the last few years. This has permitted homeowners to draw on the equity from their homes in order to achieve various goals: debt consolidation, renovations, purchasing a cottage or rental property, paying for major life events such as university education, or even getting a better rate and product to suit homeowner’s ever changing needs.
With the new government rules, the equity that a homeowner can access is now limited to 80% of the market value of the home. This is to ensure (amongst other things) that home owners are not utilizing their homes as “cash machines” to fulfil their immediate needs, and to maintain a stable growing economy without too much debt per household.
Come in for a FREE consultation, and we will help you determine whether refinancing is the right choice for you, what costs are involved, what the process is to move forward, and furthermore, we will ensure that it makes sound financial sense for you to do so!
Renovations and/or Debt Consolidation
You have been in your home for several years and are looking to spruce it up?
You have some debts that have been accumulating and the credit card rates are high, does it make sense to refinance to pay down those debts?
Refinancing your home does not need to be complicated.
Come and spend an hour with me and we will ascertain approximately how much equity you have in your home, and whether it makes sense to consolidate your debts and roll them into your mortgage at these (still all time low!) rates!
What you will need to know for us to review:
- Your most recent mortgage statement
- Your most recent tax bill
- An idea of what your home may be worth on the market today
- Most recent copies of the bills you want to consolidate
- When did you purchase your home? How much did you pay for it?
- Your current list of assets (vehicles, savings, etc)
- Have you completed any renovations since your last renewal/refinance?
- Recent pay stub along with a letter of employment from your employer stating your position, tenure and income and status (i.e. permanent part time, permanent full time, guaranteed hours per week, etc).
- If any of the following applies to your work situation we require A LOT more documentation: paid on an HOURLY basis, any other PENSIONED or DISABILITY income, any INVESTMENT INCOME, CONTRACT work, SELF-EMPLOYED individuals, any BONUSES or OVERTIME to be used to qualify for the refinance we will need: two years of your T1 Generals (the documentation that is utilized very year to file your income tax return with Revenue Canada), your T4’s and your Notice of Assessments (the document that you receive from Revenue Canada after you file your income tax return each year: this states your total income for the previous year along with available RRSP contribution room, etc) – most recent two years.
- A copy of your home property insurance (fire, etc) showing active policy and cost replacement value
The rest we will determine during our meeting and information required will be similar to when your first mortgage application was done!
We will determine what your exact outgoing debts are and assess the potential savings of a refinance for you. With accurate information, you can make an informed decision on whether or not it is in your best interest to move forward. Don’t forget, we can ensure that you still pay off your mortgage according to your goals, by utilizing our hedging strategy and reviewing those goals together!
Answers to Frequently Asked Questions:
- Appraisals: Yes. Refinances often require an appraisal in order to confirm/ ascertain the value of your home on the market. At times, lenders have specials that permit you to get your appraisal at a lesser cost, or even permit you to refinance without the cost of a lawyer…your agent will let you know about these specials and whether they can be applied to your situation.
- Will there be a penalty to break my current mortgage? Yes. Unless you refinance at your time of renewal, there will be a penalty applied to breaking your mortgage early.
- Variable rate penalties are always based on 3 months interest on your current mortgage balance.
- Fixed rate mortgage penalties will be based on an interest rate differential calculation. This will be explained to you in detail during our meeting – how it works, what you can expect, and how do we ascertain your exact penalty?
- We will ascertain whether or not it is worth your while to break the mortgage early, providing you with concrete numbers to justify whether it is best to stay put in your current mortgage scenario and wait for your renewal, or else refinance early to accomplish your plans!
