If you have an existing mortgage, you may at some point consider refinancing it. In practice, this means replacing your current loan with a new one at different interest rate.

Why Refinance

Homeowners choose to refinance their mortgage for a few reasons, including:

  • Taking advantage of a lower interest rate—If interest rates fall, refinancing can allow you to lower your interest payments.
  • Tapping the equity in their home—Refinancing a mortgage can permit you to access up to 80% of your home’s value (less any outstanding mortgages).
  • To consolidate their debts—Assuming you have sufficient equity in your home, refinancing your mortgage can allow you to combine other debts (such as credit card debt and auto loans) into one at a more favourable interest rate.

How to refinance your mortgage

There are a few ways to refinance a mortgage, such as:

  •  Take out a home equity line of credit (HELOC)—A HELOC allows you to access the equity in your home and use it to renovate your home, buy an investment property, or for whatever you want. You only have to make interest payments on the amount you
  • Break your mortgage contract—You may decide to break your mortgage contract if you can get a lower interest rate from another lender. It only makes sense to break your mortgage if the penalty to break your mortgage doesn’t exceed your potential savings
    by getting a lower rate.
  • Blended mortgage—A blended mortgage occurs when you want to access equity in your home, get a lower mortgage rate, or both. Your rate will be in between your current mortgage rate and your new rate. While you won’t have to pay a prepayment penalty, you won’t get the best rate either.   

The costs of refinancing  

Before refinancing a mortgage, it’s important to check that it makes financial sense. For example, you may be able to obtain a lower interest rate from another lender, but after paying the prepayment penalty, it may not be worth it. If you have a fixed-rate mortgage, the prepayment penalty is three months of interest or what’s known as the interest rate differential payment, whichever is greater. If you have a variable-rate mortgage, the prepayment penalty is simply three months’ interest.

Finally, keep in mind that you typically have to pay a lawyer if you’re refinancing your mortgage (although if the mortgage is greater than $200,000 the financial institution may cover this cost. Before going ahead with refinancing, this is something else you
need to be aware of. If you want to refinance your mortgage, contact CanWise to help you with your needs. 

[ Sample Case – 자영업자, 재융자 ]

은행타입B급 은행승인 날짜May, 2022
IncomeHusband식당운영SpouseNot in deal
Credit ReportHusband700Spousen/a
Market Value$1,000,000
Mortgage Amount$700,000
Int. Rate & Type3.64% fixedVariable
Monthly Payment$3,187.00Interest$2,1071080
필요한 서류 목록: 감정, Business Licence, 3개월치 비즈니스 구좌
자영업의 인컴은 정부에 보고한 개인소득에 15% add 하는 것이 최대로 AAA 은행에서 모기지 승인을 거부받은 상태로 저희에게 오셔서 위의 Program으로 원하시는 모기지 금액을 받아 잘 진행된 Case입니다.