Mortgage Refinancing
A mortgage refinance is the process of breaking your current mortgage contract and replacing it with a new, larger mortgage while withdrawing the difference in cash.
Provided that you qualify to do so, this process will allow you access to your home equity and use it for whatever you would like.
Unfortunately, you are not able to access all of the equity you have available in your property. Lenders will only allow you to refinance your property up to 80% loan to value which is based on the fair market value of the home. The fair market value will be determined by an appraisal completed by a licensed Real Estate Appraiser.
For example, if your home is worth $350,000 and you owe $150,000 on your mortgage that means you have $200,000 worth of equity in your home.
Using the example above, if your property is worth $350,000, 80% of the market value would be $280,000. You would replace your existing mortgage of $150,000 with a new mortgage in the amount of $280,000 and withdraw the $130,000 difference.
The equity that you pull out of your home can be used for many things such as:
Provided that you qualify to do so, this process will allow you access to your home equity and use it for whatever you would like.
Unfortunately, you are not able to access all of the equity you have available in your property. Lenders will only allow you to refinance your property up to 80% loan to value which is based on the fair market value of the home. The fair market value will be determined by an appraisal completed by a licensed Real Estate Appraiser.
For example, if your home is worth $350,000 and you owe $150,000 on your mortgage that means you have $200,000 worth of equity in your home.
Using the example above, if your property is worth $350,000, 80% of the market value would be $280,000. You would replace your existing mortgage of $150,000 with a new mortgage in the amount of $280,000 and withdraw the $130,000 difference.
The equity that you pull out of your home can be used for many things such as:
- Debt consolidation
- Home renovations
- Investing
- Children's education
- Travel
- Large purchases (boat, vehicle, vacation house, etc.)
Costs Associated With Refinancing
Typically, there are some costs that are associated with mortgage refinancing. These costs will vary depending on the amount of equity you are looking to withdraw, which lender your existing mortgage is with and, the lender that you choose to place the new mortgage with.
The most common expenses involved in the refinance process are:
1. Penalties - If your current mortgage has not yet reached the maturity date, you will be charged a penalty for breaking your mortgage contract early. The penalty amount will depend on many factors such as the type of mortgage product you have, the remaining balance owing on your mortgage, the lender that your current mortgage is with and, how much interest rates have fluctuated since you signed your original mortgage contract.
2. Appraisal costs - As mentioned above, in order to determine the market value of your property you must get it appraised using a licensed Real Estate Appraiser. In Winnipeg, the average appraisal costs around $200-$400.
3. Legal Fees - Since you will be registering a new loan against your property, the title of the property will need to be amended to reflect the new loan amount. This process needs to be completed by a Lawyer or a Title Insurance Company which means there will be fees incurred for using their services.
Sometimes, mortgage lenders will offer promotions which will cover the expenses associated with setting up the new mortgage.
Give me a call today to discuss all of the refinancing options available to you!
The most common expenses involved in the refinance process are:
1. Penalties - If your current mortgage has not yet reached the maturity date, you will be charged a penalty for breaking your mortgage contract early. The penalty amount will depend on many factors such as the type of mortgage product you have, the remaining balance owing on your mortgage, the lender that your current mortgage is with and, how much interest rates have fluctuated since you signed your original mortgage contract.
2. Appraisal costs - As mentioned above, in order to determine the market value of your property you must get it appraised using a licensed Real Estate Appraiser. In Winnipeg, the average appraisal costs around $200-$400.
3. Legal Fees - Since you will be registering a new loan against your property, the title of the property will need to be amended to reflect the new loan amount. This process needs to be completed by a Lawyer or a Title Insurance Company which means there will be fees incurred for using their services.
Sometimes, mortgage lenders will offer promotions which will cover the expenses associated with setting up the new mortgage.
Give me a call today to discuss all of the refinancing options available to you!
Click the button above to contact me today.
Castle Mortgage Group
100-1345 Waverley Street
Winnipeg, MB, Canada
R3T 5Y7
100-1345 Waverley Street
Winnipeg, MB, Canada
R3T 5Y7