Author: Paramjit S. Girn

paramjit s. girn

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Refinance Mortgage Triad


Also known as a Home Equity Loan, a refinance mortgage on a home means adjusting the terms of your mortgage, by tapping into the home equity. Some home owners do this to leverage their homes equity to pay off for home repairs, medical bills or even a university education. Others simply want to pay off their consumer debts like credit cards, car loans, unsecured line of credits etc. Without smart planning, however, the advantage you once conceived of can turn into a nightmare! Be sure to know what you are getting in to, and how to leverage your strengths for maximum benefits where time and money is concerned.

home buyers triad


Refinance Mortgage: the Advantages

  1. Mortgage Term Re-negotiation
  2. This allows you to get better mortgage terms depending upon your situation. This is your golden chance to in fact correct your previous mistake when you got you rmortgage.Do you know what kind of lien did your bank has put on your house i.e. Standard or collateral liens and how they affect your access to your equity...

  3. Lower Interest Rates
  4. The size and type (variable or fixed) of your outstanding mortgage has the potential to save you money over time. Talk to your agent about hard numbers.

  5. Increased Cash Flow
  6. Via mortgage refiance you can access up to 80% of your home’s value (less outstanding mortgages). That means more money for home renovations or your children’s future. There is more than one way to access this equity. Talk to your mortgage agent.

  7. Lower Overall Debt
  8. With enough home equity, a refinance mortgage allows you to pay out high interest debt, and that is irresistible to many home owners. Debt consolidation is smart financial management with the right refinancing approach.

  9. Real Estate Investments
  10. Mortgage refinancing can open up significant opportunities for your financial future by freeing up the funds required for investing in reale state.

  11. Home Extensions, Upgrades or Renovations
  12. Think ahead. Is there a possibility you will want to sell your primary residence and relocate? Extensions, upgrades and renovations not only increase your property value, they improve your quality of life. You are enabled to do all this via refinance mortgage .

Smart Strategies & Tips

A refinance mortgage is not something you want to gamble on so the need for vigilance is paramount. It’s also not something you want to do to finance your trip to Casino Niagara or the Woodbine Race Track! Mark my words, you will sorely regret it if you do.

Successful mortgage refinancing demands smart strategy and an informed mindset. Keep these factors in mind:

  1. Cost of Refinancing mortgage depend on the strategy you use to access equity or lower your interest rates, and the potential for legal fees also must be taken into account.
  2. Do not allow yourself to be seduced by low rates in advertising copy. The reality is a very different picture indeed, and many have learned this the hard way.
  3. Know the costs and fees associated with refinancing, because some times these can add up to an amount larger than you had hoped to gain! Applications, appraisals and inspection fees are just three examples.
  4. Be sure to balance your short and long term goals – refinancing is a serious undertaking!
  5. Monthly payments for variable rate mortgages can shift according to interest rates.
  6. If you are mid-term in your mortgage, breaking it will likely incur prepayment penalties, which can be greater than three months interest for fixed mortgages.
  7. Always discuss your credit, income and equity profile with a knowledgeable mortgage professional in advance of a refinancing your mortgage to ensure success.
  8. Never inflate your home price as lenders commonly ask for appraisals. You want to be certain to present yourself honestly.
  9. Dig deep to learn about all your options when it comes to specialty refinance mortgage products you may benefit from.


Methods to Refinance Mortgage

There is more than one way to tap into your home equity so careful forethought and planning is important to choosing the right avenue for your needs. Here are three:

  1. Early breaking of existing contract
  2. This option only makes sense if you need lower interest rates or home equity access. Basically it means eliminating your current arrangement and assuming a new one with a lender of your choice.

  3. Home equity line of credit
  4. You can always add a home equity line of credit but you will be on the hook for monthly, interest-only payments toward the outstanding balance. This may be accessible through your current lender.

  5. Extend or blend your current agreement
  6. A blended rate means you blend your current mortgage rate with any additional funds you borrow at current market rates. A lender may offer you this, but it is important to compare the blended rate against any savings if you break your mortgage.


    Other Options

    It’s helpful to know that even if a lender rejects your file, our non mortgage solutions can still be a viable alternative with regard to your mortgage refinance needs. For information about refinance mortgage, or to discuss your mortgage situation, arrange a confidential Strategy Session today.


    Need Recommendations?

    Take a moment to fill out our short mortgage refinancing application form for a quick and convenient evaluation of your situation. After your evaluation you will receive recommendations for the most effective solution tailored to your need.

    Choose the best possible scenario from the table below if you are looking to refinance your mortgage.


    Credit Score

    A credit score of more than 720 is good but again, best you hire a mortgage planner to help iron out any inaccuracies that might be in your report. Following are guiding criteria in selecting options for the table below. Select “not sure” if any of the following situations apply to you:

    • You do not have a credit rating because you are new to the country, have been discharged from a proposal or have previously gone bankrupt
    • Your credit score is less than 720
    • You have never used a credit card, preferring to rely on cash
    • You have a history of late payments in the last three years
    • Unpaid bills have been forwarded to collection agencies in the last three years
    • You’ve never checked your rating and simply don’t know.

    If you have any questions whatsoever about your credit score, contact us, we can help!


    Sufficient Verifiable Income

    Your sufficient verifiable income is comprised of your gross income available for payment of all debts as per lender requirements. Income that qualifies cannot be income derived during probationary period for a job and must accompany proof of employment such as letters, recent pay stubs, notice of assessments or TI Generals.

    Keep in mind as well that income requirements differ from product to product. Don’t hesitate to contact us for more information!

    On the table below, select “not sure” if any of the following situations apply to you:

    • Much of your income is cash (for example commission or tips)
    • You are in business for yourself (BFS)
    • You are presently on employment insurance, maternity leave or similar
    • Your total income before taxes is less than $50K a year

    If you still have questions about your income status, give us a call!


    Home Equity

    On the table below, select “not sure” if any of the following situations apply to you:

    • Your home equity is less than 20%
    • You use secured or unsecured lines of credit
    • You don’t know what your home equity status is

    If you have any questions that can help you determine your home equity status, give us a call!


    Credit Income Home Equity Next Step  
    Good Good At least 15% or more I am Ready! Let's Meet for Mortgage Strategy Session i am ready
    Not Sure
    Not Sure
    At least 15% or more
    At least 15% or more
    Not Sure
    My credit is Shot. Need to Discuss Mortgage Strategy
    Stuck with Cheap Employer. Help me Refinance my Mortgage
    Advice me on my Mortgage Refinancing Options
    credit shot
    Others Others Others My situation is very special. Need to discuss it with a mortgage expert immediately. special situation


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