Your mortgage refinancing
Do you need funds for a project that is important to you? Mortgage refinancing involves borrowing additional money against the equity in your home – the difference between the current market value of your home and what you still owe.
Although you will have to pay back a larger amount later on, you will be able to use the money you need now. At Multi-Prêts, we can help you find out more about mortgage refinancing and determine if this is the best solution for you!
Why and when to refinance?
There are several excellent reasons to consider refinancing your mortgage. For example, you can use the money you receive to make renovations or repairs to your home (re-roof, add a floor, finish the basement, etc.). You are free to use the money as you wish! Here are some other potential ideas:
- Buy another property (cottage, condo, etc.);
- Investing (investment products, RRSPs, rental property, etc.);
- Pay for travel or education;
- Take early retirement;
- Start your business.
If you qualify, you can refinance your home whenever you want. However, depending on your situation and the costs involved, it may be best to do so when your mortgage is almost due.
How does mortgage refinancing work?
The amount of your mortgage refinance is calculated based on the equity in your home, which increases over the years and as you pay off your loan.
To determine this amount, you need to know the current market value of your home and your mortgage balance. Then take 80% of the value of your property and subtract your balance to get the maximum amount you can borrow through refinancing.
Our brokers can help you get a good idea of how much money you’ll receive, so you’ll know if you want to proceed with this option. If so, they will walk you through each step.
What factors are considered for refinancing?
Refinancing your mortgage depends on a variety of elements. Each of these is evaluated and reviewed to determine your eligibility and the amount you can obtain. At Multi-Prêts, we inform you about each of them and help you fill out the appropriate documents. Here are the important elements that are taken into account in the process:
- Proof of household income (pay stub, letter from your employer);
- An evaluation of the value of your property;
- Information about your credit history (score, etc.);
- Your assets and liabilities (possessions, debts);
- The amount you would like to borrow.
Another option: the mortgage line of credit
Instead of refinancing your mortgage to finance your project, you can turn to a home equity line of credit. Also based on the market value of your home, it offers more repayment flexibility: you can repay the principal amount of your choice at any time, or you can repay the entire balance without prepayment penalties.
You can use a portion of the funds as you wish and use another portion later, without having to reapply for credit, and with a lower interest rate than most other financing solutions. The mortgage line of credit can be used for any type of project or need.
If you are having difficulty making all your monthly payments, whether it is because your debts are very high, because they are badly spread out or because the interest rate charged by your creditors is too high, debt consolidation can help you.
It allows you to have a loan that frees up liquidity to simplify the restoration of your budget and limit the high amount of money you have to pay in interest charges.
If you are interested in this option, remember not to wait too long, as a tainted credit rating can make it more difficult to obtain financing.
How to get approved for refinancing?
A good preparation is essential for you to receive an approval for your mortgage refinancing. Your Multi-Prêts broker can make this process as easy as possible.
He will help you provide the necessary financial information to prove that you will be able to pay for the financing.
Your income (before taxes), your monthly housing and living expenses and your total debts, among others, will be taken into consideration and will have an impact on your approval.
Take advantage of a complete accompaniment!
At Multi-Prêts, we make it our duty to help you reach your goals by accompanying you through the process.
We make sure to facilitate each step of the process and provide you with the explanations you need to make informed and relevant decisions.
Use our contact form to find out how to refinance your mortgage!
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