REFINANCING AND DEBT CONSOLIDATION
VANCOUVER BUYERS GUIDE
Refinancing your mortgage means that you are changing either the amount or the amortization of your mortgage. You are able to refinance with a new mortgage up to 80% of the value of your home if you can show you qualify for the new mortgage payment.
In today’s environment, refinancing your mortgage can be an excellent solution for a large variety of reasons:
- Improving cash flow. Recent economic events will leave some households feeling squeezed month to month when paying all of their bills. Refinancing and either consolidating accumulated debt or stretching the mortgage back out to 25 or 30 years can offer monthly relief. If current rates are lower than your existing mortgage, this can be an opportunity for more interest savings. Full feature mortgages will have prepayment allowances should you wish to increase your payments back up when you feel ready, but you will only ever be obligated to pay the new, lesser monthly payment.
- Renovating your home. Whether it is to build that new kitchen or bathroom you’ve always dreamt of, or whether it is to finally finish the basement suite so you can rent it out, there are many options available to you such as a Refinance and Improvement mortgage (where you can borrow up to 80% of the ‘post renovation’ value), adding a secured HELOC (where you only pay interest on what you use, and can pay it off as quickly as you’d like with no penalty), or restructuring the existing loan to add the amount of money needed into your low interest mortgage.
- Buying a vacation home, investment property, car, or other big-ticket item. The equity in your home can help you obtain the down payment you need for a new purchase, or save you money by obtaining a very low interest rate on a loan instead of turning to higher consumer loans or credit cards.
- Supporting your family. Whether it is helping an ageing parent with care, a child with their schooling or a life event, or your grown children with a down payment to buy a home of their own, using the equity in your home can be a way you can help with these costs now.
- Consolidating higher interest debt. If you are managing multiple higher interest debts such as credit cards, LOCs, and loans, it can make sense to consolidate these into your lower interest mortgage and into one, simple payment. This will significantly improve your cash flow and you will pay this debt off much faster as you will be putting more toward the principal amount of the debt and giving less away to unnecessarily high interest!
- Financing your future. If it makes sense in your situation, redirecting unused equity in your home to higher yielding investments can be a great strategy.
We will speak with you to understand your current situation and goals, and together will determine which approach and product will work best for you. This could be a new fixed or variable mortgage, a low interest Home Equity LOC (either on its own or in combination with the fixed or variable mortgage), a Blend and Extend on your current mortgage (incurring no penalty, but adding more money and starting a new term), a Refinance and Improvements mortgage, or even a low interest Equity Visa that is secured against your home. We will walk you through the pros and cons of each of these to find the right solution for you.
A refinance in most cases will mean you will need to pay a penalty to break your current mortgage (unless utilizing one of the strategies referenced above) – we will run the numbers for you to determine if a refinance is right for you, and let you know the savings or cost to do so.
Any refinance will also require a new appraisal to determine the current value of your home, and will require legal fees as changes to the title are made when changes to the amount or amortization are made to your mortgage.
Our team will help you from first call through to following up with your lawyer at closing to ensure your refinance experience is a smooth and a happy one!
Call NOW or email me personally to discuss if refinancing is the right solution for you!