Refinancing – What is it and what’s the process?
Mortgage refinancing is the process of paying off an existing loan and replacing it with a new loan with different terms than your original mortgage.
There are many reasons why home owners choose to refinance a mortgage. The most popular reasons being converting from a variable rate mortgage to a fixed rate one (or vice-versa in some cases), consolidating debt from higher interest loans or credit cards or accessing some of the equity in the home to finance larger purchases such as renovations, a new vehicle, or a down payment on an investment property.
Refinancing is often confused for having a second mortgage, but in reality, the two are very different. A second mortgage is in addition to your first and does not replace it as a refinancing would. Mortgage refinancing gives the borrower new money that can be used to pay off the original mortgage, ideally with better terms.
Should I refinance?
The decision on whether or not to refinance should be based on your financial goals. For example, if you’re looking to improve your monthly cash flow, take advantage of lower interest rates to reduce your payment or consolidate debt, refinancing may be a viable option.
Unfortunately, every situation is unique so consulting with a mortgage professional who can calculate potential costs, penalties and legal fees for your refinance is always a smart decision before proceeding.
I’ve decided to go ahead. What’s the process to refinance?
If you decide to take advantage of refinancing, your mortgage professional or current lender will need to process an application, similar to the one you did when you first got your mortgage.
This means you’ll need to be prepared with documents, paperwork, and an appraisal that supports your application.
- Depending on your credit and other variables, your mortgage professional will likely ask for proof of income, such as pay stubs, T4 slips and employment letters.
- You will likely need to have an appraisal done on your property to determine the current value and thus what you’ll be able to borrow. Your mortgage professional can order an appraisal on your behalf, but you may be on the hook for costs of the appraisal
- You’ll need to hire a lawyer to put together required documentation, title insurance and arrange for signing the new mortgage documents. Deeded can help with your mortgage refinancing and make closing your refinancing a breeze.
How can Deeded help?
When it comes to refinancing your mortgage, our team at Deeded makes the process as easy as possible so you can “close” and access your money quicker.
Our team helps you understand your obligations, can expedite the process and help you navigate the legal documents that needs to be signed before funds are released to you.
With Deeded you’ll never need to leave your home to close your mortgage refinancing deal. We’ll come to your home and office, making it convenient and stress-free.
We also made our fees for refinancing your mortgage clear and transparent so we can avoid surprises at closing and leave more money in your pocket.
Important note: This article is not Legal Advice. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.