“The last two mortgages Kam closed for me were just piece of art. Not only I had a limited time but they also crossed referenced each other (one need another one to be closed first) not to speak on a weak credit history. and penalties on one of my closed term mortgage.
I ended up with no debts and two brand new mortgages with superior rate. Guys – you are my hero !!!”
Originally posted on Facebook.
Mortgage Renewal or Refinance
What is a Mortgage Renewal?
renewalIn most cases, your mortgage term – the length of time for your agreement with a particular lender – will be shorter than the amortization. When your term is coming to an end, it’s time to look at your options for renewing your mortgage. Practically, this means deciding whether you want to stay with your existing lender, checking what interest rates are being offered at this time, and considering your current financial goals.
Think about your life 5 years ago.
- Where were you working?
- Has your relationship status changed?
- What kind of lifestyle were you living?
Think about where you want to be 5 years from now.
- Will you have changed jobs or earned a promotion?
- Will your family be growing?
- How will you be growing your investments?
If your answers to these two sets of questions are very different, you’re not alone! Our lives and goals change, and your mortgage should also change to support that. However, most Canadians sign their mortgage renewal letters and mail them back without contacting another bank or a mortgage broker. Maybe they don’t have the time to shop around, or maybe they don’t enjoy haggling with a bank to get the best overall mortgage and rate. Whatever the reason, the good news is that our team of professionals is happy to do it for you!
How to Renew Your Mortgage with Auxilium
The mortgage renewal process is very similar to our regular approval process, and it’s easy to get the ball rolling. If you have all of your documents ready, we can typically have a solution for you in only three to five business days.
Documents you need to renew a mortgage:
- A mortgage application to review your basic details with one of our brokers
- A copy of the latest Insurance Statement for the property
- Your most recent BC Assessment and property tax notice
- A copy of the most recent mortgage statement which shows: name of the lender, mortgage reference number, approximate mortgage balance, current monthly payment and mortgage renewal date. An annual statement is perfect for this, or these days an online statement works just as well.
- Verification of income from your employer, usually as a Letter of Employment
- Two current paystubs
- If you’re self-employed, for income verification lenders require both your T1 Generals and Notices of Assessment for the previous two years
With all of the documents on file, our team will be able to review your options with you. Once you decide to proceed, we’ll continue to manage all the details of the transaction with the lender, appraiser and lawyers, as with all of our clients.
What is a Mortgage Refinance?
If you’ve built up some equity in your home and your loan-to-value is below 80%, you may want to refinance your mortgage to access some of those funds. The overall amount of your mortgage will increase and be treated as a single transaction. Many people consider refinancing at the end of their mortgage term, but depending on your current product – and any penalties for early payment – it may be possible mid-term.
There are costs associated with refinancing, but our team will lay those out for you and compare them with the money you will save before we proceed. The process is similar to renewing your mortgage with our team.
Why Refinance Your Mortgage?
There are many reasons to consider refinancing your mortgage:
- Paying for a renovation or other property upgrade
- Restructuring your other debt
- Securing funds for other investments at a lower interest rate
If you’re looking at this solution, you’ll want to make sure you’re planning to stay in your home long-term (5-15 years) to fully realize the potential savings.
Second Mortgage Financing
A common myth about second mortgages is that they are always really expensive and come with a high rate. While this is sometimes the case, there are other options out there.
A second mortgage can be another way to access the equity in your home. The primary benefit is that it allows you to borrow more funds without having to break your existing mortgage. This could be the best solution if your first mortgage has a great rate that’s no longer available, or if you would have to pay a penalty to pay out your first mortgage early.
Working as a team, we are able to bring the experience and knowledge of our entire staff to your file. Once we know your overall goals, we look at all the options available to you and discuss what will be the best solution for your situation.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) is a line of credit that is secured against the equity in your home. Unlike a traditional mortgage, you may have the option to only withdraw a portion of the funds, and once you’ve repaid the amount it is available to you again. It is most often registered in second place, behind your mortgage; if you’ve already paid off the fixed portion of your mortgage, your HELOC could be in first place.
This product is typically only offered by a few lenders and can be limited by your loan-to-value. Your reasons for seeking a HELOC are probably similar to refinancing or considering a second mortgage.