Refinancing a mortgage in Canada: A Quick Guide
Let’s save some time here and tell you what mortgage refinancing means.
A mortgage refinance is basically a new mortgage on your house. The entity pays the existing mortgage using a new mortgage. The new mortgage could be with an existing lender or it can be moved to a completely new lender.
Buying a home isn’t easy, especially when you have to borrow money from a lender. It could be a bank or alternative financing, but don’t start worrying if they deny your application.
Mortgage refinancing is a possibility!
Let’s say you took a mortgage from a bank and they refuse to continue, you can have a new lender and that’s called mortgage refinancing.
Since you will be starting a new mortgage altogether, there will be some options. These options include:
- Variable or fixed rate
- Mortgage term
- Payment
- Mortgage amount
The restarting or refinancing can begin any time during the term or on the maturity or renewal date.
The question is – How does mortgage refinancing work? Read on to find out!
How does it work?
- Find out how much the home is worth.
- Find out the 80% approx. value of the house. The 80% logic is basically the maximum mortgage rate on a home.
- How much do you owe? If there was a previous lender, you would need to pay the amount.
- You use the extra home equity to renovate, pay, invest, or do whatever you wish to.
How do you get in touch with a new lender?
Getting in touch with a lender can be an overwhelming task. Since you’re not aware of the business, it is best to have a mortgage broker by your side.
North East home mortgage refinancing should be a cakewalk if a mortgage broker understands your requirements.
Working with a broker allows you to follow a step-by-step method otherwise you will be doing rounds like a headless chicken.
Always remember that you don’t have to settle for the first-rate you get from the lender.
The lender would want to know your credit score, financial standing, current employment, and bank statement for the last six months. There are some prerequisites – after all, your lender is taking a risk.
If a bank refuses to pay for your home, there are mortgage lenders who lend you the amount but there are a few conditions too.
If you feel all this is overwhelming, consider getting in touch with a mortgage broker. They have in-depth knowledge about refinancing and all other financial situations.
