Mortgage Refinance
There are many different reasons to refinance your home, ranging from taking out extra money to financing renovations, to consolidating debt, to making your mortgage tax deductible using the Smith Manoeuvre and investing your equity.
Refinancing can help you to accomplish a great deal! You can use your home equity to invest in real estate or the stock market and earn a higher return than having it just sit there. By consolidating your debt you can substantially decrease your total monthly payments and improve your cash flow. Refinancing to do home renovations is also a really effective way to add substantial value to your home and enjoy it that much more!
These are just a few of the purposes for doing a mortgage refinance. Feel free to contact us if you have any questions or ideas about how why a refinance might be a good choice for you.
Refinancing Considerations
Something to keep in mind is that despite the varying number of reasons for refinancing your home, one cardinal rule still applies: you must own your home. You can refinance your home up to 90% of its value (Note, up to 85% after March 18th, 2011), but you will have to pay an insurance premium (CMHC, Genworth, or Canada Guaranty). Alternatively, you can refinance your home up to 80% of its value without needing to pay the insurance premium (as your mortgage is then considered “conventional”). The value of your home is to be determined by an appraisal.
There are some fees that you may be responsible to pay for associated with refinancing your home, such as an appraisal fee and legal fees, but quite often these fees can be added to the mortgage amount. That way, you’ll only have to pay out of your pocket initially, and will be reimbursed later when your mortgage funds.
New Canadian Mortgage Rules go into effect on March 18th, 2011!
Refinance your mortgage before the new rules go into effect and you can borrow up to 90% of your home’s value. After March 18th, 2011, you will be limited to 85% of the value under new Canadian Mortgage Rules.
Regardless of the reason you wish to refinance your home, First Foundation is able to help you out, provided that you meet the lenders’ guidelines. If you’re interested in exploring refinancing options, please Contact Us.