Mortgage Refinancing — How to Pay Off Existing Mortgage & Take a Larger One

Mortgage refinancing involves paying off your existing mortgage in order to take out a new, larger one with a different lender, or renegotiating the terms and amount of your mortgage while remaining with the same mortgage company. If rates go down, you may be able to save money by refinancing to take advantage of the new lower mortgage rates, although you will need to measure your savings against any premiums or fees that may be involved in the mortgage refinancing process. You may need to cover appraisal or legal fees, but some mortgage refinancing loans can package these fees into the mortgage refinance. This is called capitalizing the extra expense and we would have it added to your mortgage.

Qualifying Parameters for Mortgage Refinancing

In order to qualify for mortgage refinancing in Edmonton, you need to have at least 20% equity in your home as the new CMHC rules say that you can only refinance up to 80% of the value of your home. The example would be if your home was worth 100000 then you could only refinance it to 80000 dollars through conventional mortgage companies. The other option is to seek private mortgage refinancing and in that case you can refinance up to 85% of the value of the property. While this is a more expensive way to do a mortgage refinance there are situations where it may be an option.

Refinancing Documentation – Points to Keep in Mind

Once you have refinanced your mortgage the options for the money are wide open unless you had specifically assigned the money to pay bills through the refinance documents. In a lot of cases clients use the funds from the refinanced mortgage to renovate their homes, put money down on a second home or to invest in the retirement with the thought of later selling the home.

Many of our lenders use a title insurance company to transfer the mortgage refinance documents saving you legal fees and time as they will come to your home to complete the mortgage refinance documents. Some of the mortgage refinances we do are through financial institutions and they can do the documents through their branches again saving you money of not having a lawyer do the paper work for your mortgage refinance.

Over all mortgage refinancing is an option that needs to be analysed closely. We will help you weigh the pros and cons of paying early penalties and show you how much you may save buy paying down debt and reducing your monthly overhead.

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