Lets take the complexity out of your EQUITY.
Many times people need access to their equity. This is called a refinance. You are changing the title to the home. A refinance is a change in the amount owed. You are paying off your existing mortgage and obtaining a new higher amount.
Firstly, with this higher amount people can do many things:
- Payoff debt
- Renovate their home
- Put money in investments ( RRSP’s, TFSA, etc.)
- Provide down payments to loved ones for their home purchase
- Legal separation which involves division of assets
Secondly, this higher amount should:
- Generally lower your interest costs
- Increase value of home, or increase cash flow
To tell the truth, there are some cautions you want to avoid as well:
- I.R.D. – interest rate differential
- 3 months Interest – Canada website on mortgage penalties.
2. Costs associated with doing the refinance
Furthermore, you want to make sure you have your income, and documents ready, and that’s where we come in.
At Mortgage Suite we can make the refinance streamlined:
- We are 100% online.
- plus 115 Lenders to Source your approval
- F.C.T. platinum program making the refinance process streamlined.
I also wanted to show you a quick glance at the refinance numbers below just to give you an idea of what it looks like to perform a refinance. This client had a small penalty, that we were able to reduce even lower by going back to the same company. Sometimes they reduce by 20%. We were lucky on this one.
|1st Mortgage Balance||$ 185,000.00|
|Value of Property||$ 640,000.00|
|NEW MORTGAGE||$ 512,000.00|
|Left over after paying mortgage||$ 327,000.00|
|Lawyers Cost||$ 800.00|
|Total Left Over to you||$ 323,450.00|
|TOTAL DEBT PAYOUTS|
|Bank Credit Card||$ 14,000.00|
|Bank Loan||$ 3,500.00|
|Other Credit Card||$ 23,000.00|
|Line Of Credit||$ 43,000.00|
|RSP Contribution to offset taxes||$ 35,000.00|
|Total Left Over to PAY (leave on LINE OF CREDIT)||$ 74,950.00|
|Total Payment First RATE AT 1.84%||$ 2,294.00|
|Property Taxes||$ 491.67|
|Total Per month||$ 2,785.67|