refinance

Refinancing Your Home Investment in BC

Refinancing Your Home Investment in BC means that you are simply replacing your existing mortgage with a new mortgage on different terms. To find out if you qualify, your lender will calculate your “loan to value” ratio by dividing the balance owing on your mortgage and any other debts secured by your property into the current value of your property. If your “loan to value” ratio is 80% or under, you will most likely be approved. Similar to acquiring your first mortgage, the lender will also request to look at your monthly income and debts by requesting specific documents from you. As one of the Top 3 Rated Mortgage Brokers in Vancouver, we would be more than happy to assist you with your refinancing journey.

A few of the most common documents requested by lenders for Refinancing Your Home Investment are:

  • Credit Bureau
  • T4 Slips (2 years)
  • Notice of Assessment (2 years, showing ZERO balance owing)
  • Job Letter
  • Most Recent Paystub
  • Current Mortgage Statement (showing current mortgage balance)
  • Recent Property Tax Bill

Across Canada, property values have jumped 34 percent since March of 2020. In B.C., locations outside of Vancouver saw the most increase, such as Chilliwack where assessments increased 36.5 percent in November, compared with 16 percent in Vancouver. With interest rates being at the “all-time low” and BC Home Assessments coming in at an “all-time high” it’s an interesting time to be on the market. This is where a Refinancing product can help you and your existing mortgage investment best. Refinancing is needed whenever you need or want to make changes to your mortgage agreement, whether your mortgage is up for renewal or not.

Some commonly made changes that require Refinancing Your Home Investment are:

  • Increasing your mortgage amount to borrow money
  • Changing your rate before the end of your term
  • Changing the amortization period

There are several different solutions/steps to Refinancing your mortgage. We have provided two below that include breaking your current mortgage contract early and taking out a home equity line of credit, with your current lender. Each solution /step comes with unique benefits and features.

Breaking your Existing Mortgage Contract early

  • This option is most common when you are looking to get a lower interest rate or access the equity in your home. To summarize, you would be replacing your existing mortgage with a new mortgage on different terms, with a new lender.

Add a Home Equity Line of Credit (HELOC)

  • This type of product is most common when you are looking to access the equity in your home investment with your current lender and/or a new lender. A HELOC will work in a way that is like a credit card, but because this loan is secured to your home, interest rates are much lower.

There are many benefits that come with Refinancing Your Home Investment. These benefits can allow you to easily do things you previously weren’t able to do… Such as:

  • Paying for a home renovation,
  • Consolidating your current debts,
  • Re-investing by purchasing a rental property
  • Freeing up cashflow for various reasons such as paying for your children’s schooling/activities, medical expenses, any unexpected large expenses, etc.

To summarize the purpose and benefit of a Refinancing Your Home Investment…

  • Potential to get a lower Interest Rate
  • Potential to Consolidate Debt and Reduce your Monthly Debt Payments
  • Allows you to switch to a Fixed or Variable Rate
  • Accessing the Equity in your Home for various reasons such as home renovations and/or future reinvestment such as purchasing an investment property

In summary, you will need to make sure you factor in all the fees and costs before you take the next step in your Refinancing Your Home Investment journey. You will need to pay appraisal costs, legal fees, and possible pre-payment charges or penalties if you’re breaking your current mortgage early.

If any of the Refinancing Your Home Investment sounds like something you may be interested in, please reach out and one of our Senior Broker Partners would be more than happy to assess your unique situation and give you the best advice. At GLM Mortgage Group, we are with our clients for the entire journey. From the beginning, we can identify client needs, any possible roadblocks, and give a variety of tailored solutions.