Refinancing – What are your Options?
There are times when we need quick access to cash to fund our projects, support our family or get us through tough situations. What are the most sensible ways to find money? Many people don’t think twice before borrowing on their credit cards and soon find themselves buried in debts with a poor credit rating.
There are many options besides credit cards that can help you find money when you need it most. Fortunately there are excellent mortgage brokers, like the team at One Stop Mortgage Corp, who can provide timely advice and assist you in finding the money you need.
Using your Home to finance your short term and long term goals
New projects, and financial needs come up all the time. You may want to consider refinancing to:
- Pay down your debts with high interest rates
- Consolidate your debts
- Finish home renovation projects
- Invest in your business
- Pay a child’s tuition
- Take advantage of low interest rates
- Take a much needed vacation
- Buy a new car
Using your home equity can be an easy way to lower your borrowing costs without taking out a traditional loan.
There are several ways to use your home equity to find the money you need to get back your life. However, in order to access these, you will need to qualify, as well as ensure that you are able to pay back the loans to ensure your home is secure.
There are many lenders who offer refinancing options, and it is important to discuss these with your mortgage broker in order to get the best advice. With refinancing, you can have the opportunity to access the equity in your home that you have built up over time of ownership through mortgage payments and market value.
If you refinance, it may involve changing the terms of your original mortgage agreement, with the refinanced portion taking advantage of different interest rates than the original mortgage. There may be fees involved in refinancing.
Depending on your credit rating and the value of your house, you can usually borrow up to 80% of the appraised value of your home, minus the amount left to pay on your mortgage. Be aware that borrowing over 80% of the value of your home will require you to pay mortgage default insurance fees, and that the rules about the value of your home that is insured have changed. Check with your mortgage broker to see if this option is right for you.
George is planning to invest money in his business so that the company is in a better financial position to pass on to his children when he retires. He wants to refinance his home to gain access to the equity he has built up over the years.
When he contacted his mortgage broker, an appraisal of the home was ordered and he discovered it was currently worth $540,000 according to the real estate market. His mortgage broker calculated his credit limit for refinancing. This made things much clearer for George so he could decide how much credit he wanted to take out to invest in his business.
Appraised value of George’s home: $540,000
Maximum loan amount: x80%
Loan amount possible, based on current value of home: $432,000
Less current amount of mortgage: $233,000
Refinancing credit limit: $199,000
If George was approved to take out the total loan amount, he would owe: $432,000
Home Equity Lines of Credit
A Home Equity Line of Credit is similar to a regular line of credit, except that it is based on the equity in your home, and generally has a lower interest rate than an unsecured line of credit. You receive a credit limit, and are able to borrow money whenever you need to up to that limit, pay it back and borrow it again. Once you apply and qualify for a home equity line of credit, you can take advantage of this flexible option. You can take out a home equity line of credit for up to 65% of the value of your home, or you can combine it with refinancing up to a limit of 80%.
Many people who are self-employed use this option, since it allows them to borrow money when they are between contracts and pay it back quickly when they are working. If your cash flow is not constant, this is also a great option. Many people who want to do a home renovation, or take a vacation also use this opportunity to take money out of their home. Besides taking advantage of lower interest rates, a Home Equity Line of Credit also has the option of being increased as you pay down your mortgage.
Consult your mortgage broker to see if this is the option for you.
A second mortgage is a secondary loan you take out of your home, based on your home equity, from a different mortgage lender. This mortgage is in addition to your first mortgage. This option enables you to make payments on both the original and second mortgage. If you are unable to pay your mortgage and you default on the loan, the first mortgage holder has access to the funds based on the sale of your home first. Since a second mortgage has more risk for the lender, interest rates are usually higher than the first. Usually, you can borrow up to 90% of the appraised value of your home, minus the amount owed on your first mortgage. If you borrow this much, you will have to pay mortgage default insurance premiums.
Check with your mortgage broker to see if this is an option for you.
Get help and advice from the One Stop Mortgage Corp team today
At One Stop Mortgage Corp, the team of Mortgage Brokers has 20 years of success in finding the best mortgage deals for their clients. They have helped so many people get financial relief through home equity loans, debt consolidations, property purchases and solid financial advice. The One Stop Mortgage Corp team of Mortgage Brokers are able to acquire financing in both BC and Alberta.
If you are considering refinancing, give the One Stop Mortgage Corp team of Mortgage Brokers a call today. By finding you the best terms and rates, giving you solid financial advice and helping you unlock the money you need for your life, while reducing monthly payments, they will help you take back your life and provide the credit help for refinancing that you need.
A simple phone call to 1-877-874-8988 or 604-874-8988 or an email to firstname.lastname@example.org can change your life today with instant approval to get the cash you need today.
Take control of your debt, free yourself from multiple monthly payments at high interest rates and set up a home equity loan today to consolidate your debts.
1 877 874 8988 (toll free)
604 874 8988
604 874 9109 (fax)