What’s your goal or reason to refinance?
Let’s start off by assessing why you would like to refinance or pursue debt consolidation? I love to provide debt advice and money-saving suggestions and my goal is to find the right mortgage or debt repayment strategy for you.
There are many reasons why it could be beneficial to pay off your current mortgage and replace it with a new one. We will help you determine if this is the best road to take, and if we can help you on your way to getting out of debt. Read on to learn how to refinance a mortgage with Anita Groves Mortgages.
Here are some reasons why our clients refinance:
(1) To take advantage of new low interest rates (2) To access equity (cash) in their home for a variety of reasons (3) to consolidate loans and existing higher interest rate debt (4) to renovate (5) to help a child who is attending college (6) to purchase an investment property or (7) to scratch something off the bucket list!
In Canada, home owners can access up to 80% of their home’s value (85% with some lenders). Usually this is called an ETO or Equity Take Out. This is done by breaking a current mortgage and adding that current mortgage onto the new amount the client would like to access. Note that there are usually penalties involved in doing this.
An ETO can be done by getting a brand new mortgage with a different lender, taking out a home equity line of credit or blending and extending your mortgage with your current lender.
Associated Fees with Refinancing
The fees associated with refinancing your home depend on the strategy we use to access your equity. If the qualifying ratios are in your favour, we can add the penalty to break with your current lender into the requested mortgage amount. We can generally calculate what these penalties might be with a certain lender but it is also a good idea at this stage to contact your current mortgage holder first to find out if and what those fees will be. There will often be a 3-month interest penalty or an IRD (interest rate differential) calculation for breaking your mortgage. Each lender uses their own posted rates to determine the formula to break.
As well, you will always incur legal costs as a lawyer must change the financing on title.