Mortgage Refinancing in Calgary – Why Would You Refinance Your Mortgage?
Lots of reasons come to mind, equity locked away in your home is one of the things that people try to access on a regular basis. Many times people are just looking to reduce the high cost of credit cards and other debt and taking equity out of your home by refinancing it can be a better solution than paying high interest rates. Life sometimes happen as well, children starting university or unplanned illness can put a strain on many people and having the opportunity to refinance and take out cash or reduce your monthly payment can be a viable option.
Ways To Refinance A Home In Calgary
There are several ways to refinance a home, first and the most obvious would be to simply redo the mortgage and take a new fixed rate mortgage. Hopefully rates are lower than what you are presently paying and it will make for a new lower or at least similar payment. The second option for refinance to add a home equity line of credit to your home these are more commonly known as a HELOC.
Understanding The Math Behind Mortgage Refinancing
In recent years the federal government mandated that we could no longer take out the full 95 percent of equity in our homes. They made the change to the rules so that you can now only take out 80 percent of the value in a new mortgage. So if your home is worth 100000 dollars then you can only have mortgages and HELOC equalling 80000 dollars. This also brought about a change that says that if you have a home equity line of credit it can only equal 65 percent of the value and the remaining 15 percent to equal 80 percent must be in a fixed rate or variable rate mortgage. Sound confusing, it is and many people don’t realize that the change happened and that the last 20 percent of equity is locked away in your home. One way to get more out of a refinance is to go with a cash back mortgage, in some cases we can refinance your home back to 80% and ask for a cash back mortgage which could take you to 85% with some of our lenders. Rates are higher but if you need the cash it is a good option.
How To Apply For Mortgage Refinance In Calgary
Mortgage refinancing is the same process as if you were applying over again for a mortgage. The same documents would be required to present to a lender as the first time you applied, the only difference is that no down payment is required and the lender may give you cash at the end. The team and Dominion Lending Centres Brokers for Life are all experienced in the mortgage refinance process and more than willing to help you understand the process.