The Right Strategy at the Right Time

Your mortgage isn’t just a piece of paper but instead, it’s a changing and important part of your overall financial strategy. Your home is probably the largest investment and therefore it needs to be considered in your entire portfolio.

Here are the main reasons for refinancing:

1. Consolidate debts
   If you are currently managing multiple debts, you can simplify your monthly expenses by paying-off those expensive debts and having only your least expensive mortgage payment. Refinancing enables you to improve your monthly cash flow and have money to make mortgage pre-payments.
2. Get a better mortgage rate and extend the term of your current mortgage
   If mortgage rates have fallen, you may want to use this timing to pay-off some debts but also to take advantage of the lower mortgage rate and lock-in your new mortgage for a term that exceeds your current mortgage ending date. Of course, the cost of breaking your current mortgage needs to be considered but quite often the benefit exceeds the cost. I can help you determine if refinancing makes sense for you.
3. Fund renovations
   Dreaming of that new kitchen, backyard oasis or spa bathroom? You can increase the value of your home by accessing funds for renovations.
4. Support family
   Your child may be heading off to university or your aging parent may require more sophisticated medical care. Refinancing affords you the freedom to take care of your family.
5. Bolster investments
   Finance your future by redirecting your unlocked equity to investments for you or your family.

Here are some of the questions that clients typically ask about refinancing:

Q: What is involved in the process?  Is it difficult?

A: The process begins by completing an application to see if you qualify and that the refinance makes sense.  Regarding the qualification, I have access to lenders who will use the old mortgage rules (i.e. using the contract rate and a 30-year amortization —- NO STRESS TEST.  Yes, the mortgage rate is a little higher, but not that high.

If the refinance makes sense, then an appraisal will need to be ordered.  Lenders will refinance up to 80% loan to value. I will reimburse you for the cost of the appraisal once the mortgage closes.

In short, the refinance process doesn’t have to be difficult?  I will strive to make the process simple, fast and easy.

Q: Besides the appraisal cost, are there other costs?

A: There is a legal cost which is typically around $1,000 and there will be cost to discharge your old mortgage (around $300).

Q: Can I do a refinance with bad credit and property tax arrears, CRA tax arrears and other unpaid debts?

A: Yes, you can use the equity in your home to pay-off property a CRA tax arrears. Lenders will also allow a refinance to pay-out a consumer proposal.  As long as there is sufficient equity in your home, a refinance may be possible.

Regarding bad credit, lenders understand that life can serve us many unexpected and difficult events and that many times all that is necessary is a second chance.  As your mortgage agent, it is important that I get to know you so that I can give your lender the full story and explain what happened.

The key to refinancing is looking at the big picture and realizing that your non-mortgage debts are not separate from your monthly mortgage payment.  It’s all about your monthly cash outflows relative to your monthly inflows (your income). 

Refinancing can give you a refreshing start to establishing a solid financial strategy.