Mortgage Refinance for Home Renovations or Debt Consolidation
Have you been dreaming of transforming your home, but don’t know how to finance it? A mortgage refinance may be the answer.
By taking out a new loan and paying off your existing one, not only can you secure a lower interest rate on your repayment plan — potentially saving thousands over its lifetime — there are opportunities for additional funds that could help turn renovations into reality. Not only does this provide peace-of-mind with an improved living space; any increase in value also adds potential returns in future investments or sales!
Quickly and easily apply for a mortgage refinance today to see which Northwood Mortgage product is the best fit for your mortgage refinance needs.
There are many reasons why you should consider a mortgage refinance:
If your monthly bills have gotten out of control, you might be able to refinance your home and pay them off. The advantage of doing this is to lower your total monthly payments. You should have a mortgage specialist review your situation and make a recommendation.
If you have two mortgages on the same property, you can combine them into a new first mortgage, as long as the total amount does not exceed 90% of the value of the property. If the new mortgage is over 75% of the value of the property, normal CMHC/GE Capital premiums and guidelines apply, and one thing to remember here is that only outstanding amounts can be combined – any discharge penalties and costs must be paid separately at closing (please note that we have cash-back programs to help with these penalties).
If you are doing major renovations (spending over $15,000), it could be less painful monthly with a mortgage as opposed to a loan or line of credit.
You can use the equity in your home to finance the purchase of investments, and also benefit from the lower carrying costs of a secured line of credit or mortgage and also write-off the interest costs against the taxable incomes.
If you have the equity and have a desire to be a landlord, you could take equity out of your property by refinancing the mortgage to use towards the purchase of an investment property. This is also called leveraging of your assets.
The best thing we can do for our children is be good role models to them, teach them to be responsible citizens, and give them a good base with a good education. With the high cost of many things nowadays, as well as education, it is sometimes difficult to have that kind of money in the bank, but you many have it in the form of equity in your home. Education is something they will never lose on.
Closing Costs Related To Refinancing
The regular costs related to the refinancing process are: appraisal ($150-$214), legal fees & disbursements ($700-$1000), title insurance if survey not available ($225), CMHC/GE Capital Premium if mortgage is high-ratio (this cost can be added to mortgage), PST when CMHC/GE Capital premium is required, and any discharge penalties.
You should review your mortgage on a regular basis and keep up with new products and offers that are available – they may save you a bundle. When you break your mortgage contract to renew your mortgage at a new rate and a new term, you are faced with a prepayment charge to reimburse your financial institution for the lost interest income.
Typically, this prepayment charge is based on the greater amount of either 3 months interest or the interest rate differential (IRD).
What Happens With Early Renewal When You Refinance?
When mortgage refinance occurs, an early renewal of the loan may be impacted. An early renewal is a scenario where a borrower chooses to renew a loan before it matures, usually in exchange for a lower interest rate or some other benefit.
If you refinance your loan before the early renewal period, the remaining balance of the loan will be paid off with the proceeds of the new loan. As a result, the early renewal terms will no longer be in effect. However, if the early renewal period has already started, you may need to pay a penalty to terminate the renewal agreement.
It’s essential to carefully review the terms of your existing loan agreement and consult with a Northwood Mortgage professional to determine the potential impact on any early renewal terms before refinancing.
Prevent Being Caught Off Guard By A Maturing Mortgage
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When the mortgage is about to mature, most lenders will mail out their renewal agreements around 30 days before the mortgage matures. Often, this causes a lot of grief for many people, especially if rates start to climb just before the mortgage comes due.
Northwood Mortgage in Ontario can guarantee your rates up to 120 days (4 months) before your mortgage comes due, and this service is free and with no obligations. Just this protection could and has saved thousands of dollars for our clients. Let’s get it working for you, too.
When your mortgage is due for renewal, it’s a great opportunity to make sure that you’ve got the right mortgage for your present needs. Since the mortgage is fully open at this time, this is the perfect opportunity to pay down your mortgage. Whatever you can afford, even a small amount, will have a significant impact in terms of interest you will save over the life of the mortgage.
It is also a great opportunity at this time to consider a more frequent payment method, such as bi-weekly or weekly, if you are not already doing it. And of course, choosing the new term is important. Another step you can take to save thousands of dollars in interest is if at renewal the rates are lower than the rate you just had, and you are comfortable with making those payments, keep the payments the same at the lower rate and start planning for the mortgage-burning party.
Thousands of Canadians Refinance with Northwood Mortgage
Refinancing your mortgage can be a complicated process, but with Northwood Mortgage, you’ll have an experienced mortgage broker to help you through the entire process.
Our team will provide insight and advice on all available options that fit your individual financial needs. With access to many different lenders and mortgage products, we can help you find the best rates for you. Not only that, but our solutions can lower monthly payments, pay off mortgages faster, and unlock equity quickly.
Don’t wait any longer – click the “Request Rates” button or call us today to get started on achieving your mortgage refinancing goals!