Do you owe money on your credit cards or for property taxes? Thinking of buying a new vehicle or doing some home renovations? Are today’s interest rates lower than what you are currently locked in at? Want to take advantage of lower rates and purchase a rental home or cottage?
If you answered YES to any of these questions then REFINANCING may be a good option for you. By refinancing, you can “roll-in” your current debts to your mortgage by taking equity (money) out of your home to pay those debts off. Instead of paying numerous bills (credit cards, loans or lines of credit) every month, you will make one payment and take advantage of much lower interest rates.
Banks will allow you to refinance up to 80% of the current value in your home.
(80% of your current home value – Mortgage Owing = Equity Available)
How do you access that equity?
Step 1) Determine the value of your home.
In most cases an appraisal is completed to verify this value (I can help arrange this)
Step 2) Multiply the value of your home by 0.8 to determine 80% of the value and the maximum dollar amount you can refinance.
Let’s use a value of $200,000 as an example.
$200,000 x 0.8 = $160,000 (the maximum you can refinance to).
Step 3) Have your trusted mortgage professional (I know a guy) confirm you qualify for the requested mortgage amount.
Step 4) Subtract your current mortgage balance owing from this figure for the total amount of equity available in your home.
For this example we’ll say you currently owe $100,000 on your mortgage:
So: $160,000 (80% Value) – $100,000 Current mortgage balance= $60,000 of equity available which gets deposited into your account upon closing.
Use that equity from your refinance to pay off debts, buy a car or finally renovate the bathroom that hasn’t realized it should have died with disco.
Timing: We recommend a timeline of 2-4 weeks for a refinance. This will allow us time to ensure a smooth process through each stage of your financing.
COSTS
Bank: If we keep your mortgage at the present lender and simply “blend” the new money with your existing mortgage, then there is NO FEE from the lender to break the mortgage. *It is worthwhile to do the math however as it may be advantageous if rates are lower than your present mortgage to “pay some to save a LOT” in the long run (something we inherently complete for all our clients to ensure they are making the best decision).
Solicitor: A Lawyer must register the new amount of your mortgage. Cost will average $1000 and comes from the proceeds of the refinance, not out of your pocket.
Appraisal: We seek from lenders an “automated property valuation” to support the value of your home that you’ve determined. However, should the value not be supported, an appraisal will be required to confirm the value. This is usually around a cost of $275 depending on the location of your property.
Contact me any time to discuss refinancing and determine if it’s right for you.