{"id":233,"date":"2023-03-28T09:25:56","date_gmt":"2023-03-28T09:25:56","guid":{"rendered":"https:\/\/budgetrates.ca\/?post_type=service&p=233"},"modified":"2023-05-02T07:07:33","modified_gmt":"2023-05-02T07:07:33","slug":"refinancing","status":"publish","type":"service","link":"https:\/\/budgetrates.ca\/fr\/service\/refinancing\/","title":{"rendered":"Refinancing"},"content":{"rendered":"
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What is refinancing?<\/h2><\/div>\n
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Refinancing a mortgage involves taking out a new loan on the equity of your home.
\nHome equity is the difference between the value of your home and how much you owe on your mortgage.
\nHere is an example: if your home is worth $250,000 and you owe $150,000 on your mortgage, you have $100,000 in home equity.
\nWhen you decide to refinance your mortgage(s), you are merely replacing your existing mortgage loan(s) with a new mortgage.
\nThe procedures are the same as those you went through when you first bought your house. You must fill out an application, have your mortgage application approved by an underwriter, and successfully meet all other requirements before the new mortgage can be closed.<\/p>\n\t<\/div>\n<\/div>\n\n\n\n\n\t\t\t<\/div> \n\t\t<\/div>\n\t<\/div> \n\n\t

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Who is refinancing for?<\/h2><\/div>\n
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While there are a variety of factors that can influence your decision to refinance, it is often based on your particular situation. You might fit into one of the following categories, or your motivation might be more personal:<\/p>\n\t<\/div>\n<\/div>\n\n\n\n

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  • Planning for retirement (using additional money)<\/strong><\/li>\n
  • Travel<\/strong><\/li>\n
  • Tax planning purposes<\/strong><\/li>\n
  • Build a reserve of money for foreseeable needs<\/strong><\/li>\n
  • Rates have dropped, so you could lower your interest rate<\/strong><\/li>\n
  • To reduce the amortization period, for example, from 30 to 15 years as you get closer to retirement<\/strong><\/li>\n
  • Your credit score has improved, and you’re now eligible for a lower rate.<\/strong><\/li>\n
  • For financial planning purposes (ex: to max out your RRSP contribution)<\/strong><\/li>\n
  • Credit and\/or debt consolidation<\/strong><\/li>\n
  • Home renovations<\/strong><\/li>\n
  • Adding a home equity line of credit<\/strong><\/li>\n
  • Investment in real estate or other opportunities<\/strong><\/li>\n
  • Vacation properties<\/strong><\/li>\n
  • Education costs<\/strong><\/li>\n
  • Unexpected expenses<\/strong><\/li>\n
  • New business\/Self employment<\/strong><\/li>\n
  • To fund personal projects. (Ex: buy a boat, a recreational vehicle, install a sauna, etc.)<\/strong><\/li>\n
  • To assist your children on their path to home ownership<\/strong>
    \n<\/strong><\/li>\n<\/ul>\n

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    And so much more! <\/div>\n\t\t\t<\/div> \n\t\t<\/div>\n\t<\/div> \n\n\t

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    How does refinancing work?<\/h2><\/div>\n
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    Compared to buying a home, refinancing is usually a simpler process.<\/p>\n

    1- Applying<\/strong>
    \nThe same information you provided to your lender or another lender when you purchased the house is required when you apply for a refinance. They will evaluate your income, assets, debt, and credit score to decide if you qualify for refinancing and can repay the loan.<\/p>\n

    2- Rate<\/strong>
    \nYou are not required to refinance with the same lender. The relationship between you and your old lender ends if you choose a new lender, who pays off your old debt.<\/p>\n

    To find the best option for you, Budget Rates will examine and analyze mortgage interest rates offered by each lender, as well as their terms, availability, and client satisfaction ratings.
    \nYou will have the option to lock your interest rate after being approved.<\/p>\n

    3- Underwriting<\/strong>
    \nThe underwriting procedure starts after the lender receives your file. The lender will now confirm your financial data and ensure that everything you’ve provided is true.<\/p>\n

    A new home appraisal might be necessary.<\/p>\n

    4- Close on the new loan!<\/strong>
    \nWhen the home appraisal and underwriting are through, it’s time to close your loan. Your lender will send you documentation with all the final loan figures a few days prior to closing, among other things.<\/p>\n

    5- At closing, you will:<\/strong>
    \no review the details of the loan
    \no sign the loan documents
    \no pay any closing costs, if applicable<\/p>\n

    It should be noted that in the case of a cash-out refinance, you will receive the money after closing.<\/p>\n\t<\/div>\n<\/div>\n\n\n\n\n\t\t<\/div> \n\t<\/div>\n\t<\/div> \n<\/div><\/div>\n\t\t\t<\/div> \n\t\t<\/div>\n\t<\/div> \n\n\t

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    What are the advantages?<\/h2><\/div>\n
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    With refinancing, you could:<\/p>\n\t<\/div>\n<\/div>\n\n\n\n

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