Refinancing is a relatively simple process which involves evaluating your home to see if you have built up enough equity and checking your income to see if you qualify to refinance. Lenders will allow you to refinance up to 80% LTV (loan to value)
Once you make the decision to refinance, you will need to provide financial documentation to support the increased mortgage amount as well as pay certain fees.
Below is an example of 80% LTV:
Estimated Home Value : $1,350,000
Current Mortgage Balance: $600,000
You can borrow up to: $480,000
**Every client situation is unique, but we strive to help each individual understand what their potential refinance could look like and can help explain both the process and the numbers.
In addition, it is important to understand the specific steps involved in a refinance as well as understand the additional costs involved.
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There are 3 main reasons most people choose to refinance their home.
1. Borrow money
If you are looking to get access to some of the equity in your home, refinancing might be the right solution for you. As long as your current mortgage is less than 80% of the value of your home you will be able to refinance your mortgage up to 80% of your home’s value.
2. Lower Interest Rate
If you are currently locked into a Fixed mortgage, if interest rates fall during your term, you won’t be able to benefit from a fixed rate so you may consider refinancing to lock in at a lower variable interest rate.
3. Change the type/terms of your mortgage
When you refinance your mortgage you are able to change all aspects of your mortgage. For example, you may be looking for lower monthly payments and thus extending out your mortgage amortization period would allow for lower monthly payments that may be more suitable for your budget. If you currently have a Variable rate mortgage and you are concerned that interest rates might increase in the near future you have the option to refinance and switch to a fixed rate mortgage. Some lenders allow you to make the switch without a fees, but each lender is specific and you would need to check with a SaeBridge mortgage agent to see what your lender will allow.
While Refinancing is a great option, it is important to remember that your savings from refinancing should always exceed the cost of refinancing. This is why we would recommend that you speak with a SafeBridge mortgage professional who can walk you through your options and help you make a wise decision.
Legal fees may vary but are the responsibility of the homeowner. You will need to work with a Real Estate Lawyer who will facilitate this on behalf of the homeowner.
An up to date value of your home is needed to help the lender assess how much money you can refinance (up to the 80% LTV) Appraisal fees range from city to city and often increase with the value of the home.
Since a mortgage refinanced means you are creating a new mortgage, you will need to pay a fee to have the new mortgage registered. **Some lenders waive this fee.
If you happen to switch lenders during the refinancing process you will need to pay a mortgage discharge fee to the lender you are leaving. This fee ranges from lender to lender.
This is by far the most expensive part of the refinancing process. Depending upon which type of mortgage you are breaking, you may have to pay a substantial penalty to get out of your mortgage contract. For Variable mortgages you will need to pay 3 months interest. For a Fixed rate mortgage you will need to pay the IRD penalty.
Refinancing is one of the best ways to access the equity sitting in your home. It allows you to review your existing mortgage contract and see if there are changes you want to make and can often help save you money.
Refinancing allows you to replace your old mortgage and make the changes that are necessary to ensure you are in the best financial position possible.
At SafeBridge, we love helping clients access the equity in their home and use the money for debt consolidation, home renovations or travel …the possibilities are endless.
Clients Steve & Janice came to SafeBridge looking for options on refinancing their Toronto home. They originally bought their home in 2012 for $860,000.00 10 years later, the value of their home had increased to $1,600,000.00 and they were looking for ways to pull out some equity that they could then use for a small addition on their home. In the end, SafeBridge was able to help them get an appraisal, refinance their home and pull out $300,000.00 while decreasing their monthly payments as a result of changing their mortgage terms.
**Each mortgage situation is unique, please speak with a SafeBridge mortgage agent to determine the specifics of your situation.
At SafeBridge our access to over 63 different lenders sets us apart. With over 20+ years in the mortgage lending space our team of mortgage professionals is qualified to help you find cottage financing that suits your needs.
No two refinancing situations are alike and we pride ourselves in customized solutions that solve your unique challenges with regards to refinancing.
When you work with SafeBridge, our team of professionals take the time to understand your situation and come up with the perfect financing solution. It is always in your best interest to work with a company that will not only help you secure financing but also keep in mind your holistic financial goals and make sure they are all in alignment. As a company we help thousands of clients each year find the perfect financing solution to fit their needs. When it comes to refinancing, our team of exceptional mortgage brokers will assist you with finding the perfect financing terms.
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Home renovations are a great way to add value to your home and refinancing can be the perfect vehicle to pay for the renovations. If you are planning to spend a large amount of money on your renovation, refinancing is a great option as it allows you to finance the project at a lower interest rate
Yes, each time you refinance you will be required by the lender to have an appraisal done. This is to ensure that the lender has the most up to date and accurate valuation of your home which allows them to calculate the LTV numbers. Remember, the amount you are eligible to borrow is based on the value of your home so an up to date value is essential.
Yes, if you want to refinance to pull out equity, you will need to break the terms of your existing mortgage which will mean you will be subject to a penalty payable to the lender that is holding your mortgage. If you have a Variable mortgage you will have to pay 3 months interest, whereas if you have a Fixed mortgage you may need to pay an IRD penalty which is much more expensive and is calculated by your lender.
Chris is a Co-Founder and Financial Advisor at SafeBridge Financial Group, the originators of Mortgage Centered Financial Planning, and is passionate about serving his clients and empowering the incredible team to “Be Better. Be Inspiring.” Prior to co-founding SafeBridge, Chris started his career as a Financial Advisor with Sun Life Financial, formerly Clarica Financial Services, and had the privilege of serving many clients financial needs for over a decade.
Over the last 20 years we’ve been successful in attracting over 60 various lenders that our clients can benefit from. SafeBridge has evolved over the years and has become a very successful company…. The education, that comes along with not just the mortgage agent side of things, but also on the insurance and the investments and the financial planning all comes together in one holistic approach.
Dena is a seasoned Mortgage Broker with 24 years experience in the financial industry. She started her career at Canada Trust as a part-time Teller while attending York University. During her 15 years with TD Canada Trust, Dena held various positions of increasing seniority. As a Senior Financial Advisor she gained knowledge in many disciplines in the banking and investment arena.
For several years Andre has worked in the Financial Planning and Mortgage Solutions field with Scotiabank. After experiencing success, and gaining a wide knowledge base in the banking world, he decided to leave the bank to join a Boutique Mortgage Brokerage, Safebridge Financial Group. Andre made the change so that he could offer clients a wider variety of mortgage options and lenders.
At SafeBridge we believe in experiencing growth together. We want to ensure that each of our agents is successful and feels a part of the SafeBridge team. We offer customized training, lender previews, team events and even team trips to build the strong culture of inclusion and support that so many of our agents enjoy.
We believe it is essential to hire and Partner with the right people. We are looking for the best and brightest in the Industry to join our Exclusive Group of Professionals. Our team consists of loyal top producing Agents that have demonstrated exceptional care for their clients and passion for the industry in which they serve. Our Mortgage Centered Financial Planning approach helps our team foster long lasting relationships, which brings a unique process to the mortgage business.
With over 20+ years in the Mortgage Industry, SafeBridge has built a solid reputation in the industry and is well respected by all major lending partners. SafeBridge has partnerships with over 10 insurance providers in Canada and has access to hundreds of mortgage products.