Category Archives: Refinancing

Mortgage Refinancing Process | Diamond & Diamond Real Estate Lawyers

Mortgage Refinancing Process

An Overview of the Mortgage Refinancing Process

A pre-approved mortgage will indicate to you the value of the home you may be eligible to afford, as well as the payments associated with various purchase prices.

It can also guarantee your mortgage rate for certain period of time to protect you from possible rate increases. You are not obligated to the mortgage broker or the bank to whom you got the pre-approval for your mortgage.

There is no cost associated with this either so there are limited risks associated with getting a pre-approval.

3 Reasons You Might Want to Refinance Your Mortgage

There are three primary reasons why you may wish to look into mortgage refinancing. These include:

  • Taking advantage of low interest rates.
  • Getting access to cash in the home.
  • Consolidating debt.

There are also several methods available to you if you wish to move forward with mortgage refinancing. These include:

  • Adding a home equity line of credit.
  • Breaking your current mortgage contract early.
  • Blending or extending your existing mortgage.

The cost of mortgage refinancing will depend a great deal on the strategy that you use to lower your interest rate or to access equity.

You may incur legal costs as a lawyer may have to charge you for changing the financing on your title. In the event that your mortgage balance is higher than $200,000, the vast majority of lenders and brokers will cover this cross.

If you are tracking your mortgage in the middle of the term in order to lower your interest rate you could be charged a pre-payment penalty. This could be significant, so it is important to investigate well in advance.

Cost of Refinancing Your Home | Diamond & Diamond Real Estate Lawyers

Cost of Refinancing Your Home

When you’re looking at refinancing your home, you should always do so with the appropriate background knowledge about all the costs associated with it.

There are pros and cons to refinancing your mortgage and you can also discuss these and the general process with your real estate lawyer.

Reasons for Refinancing Your Home

You might look into refinancing your home in order to access the equity you have built inside the home or to obtain a lower interest rate.

Although this might be the best financial solution for you, it is critical to consider the cost associated with opting for a refinance before determining that it is the right choice.

Through refinancing your home, you will be eligible to access up to 80% of the property’s value, reduced by the outstanding balance on your mortgage.

Whatever your reason, you should know what you can get out of the process as well as some of the ways that it might impact your future financially.

Two Ways to Refinance Your Home

There are two different types of refinances available in Canada: one at the end of the term and one within your term.

While you may be eligible to take equity out of your home or access a lower mortgage rate while still in your mortgage term, you could be charged a pre-payment penalty.

You may also have to pay a mortgage discharge fee, if you are switching lenders. This is typically between $200 or $350. Regarding the pre-payment penalty, this could be equal to the interest rate differential or three months’ worth or interest.