• Refinancing Your Mortgage

  • Unlocking the benefits of a HELOC or second mortgage

    Are you thinking about refinancing your mortgage? Do you have outstanding credit cards and other loans you're struggling to service? Depending on the amount of equity you have in your home, it could be worth your while to refinance your mortgage and consolidate high interest debts like car loans, credit cards and lines of credit.

    Many are deterred from refinancing because of possible penalties. But the long-term savings through lower interest rates are often much greater than any up-front penalties.

    There are also other reasons to refinance your mortgage:

    • You need cash to renovate, thereby increasing the value of your home
    • You want to release some of the equity in your current home to buy a second investment property or second home (cottage or vacation property)
  • Home equity loans: Also knowns as 'HELOC'

    Home equity іѕ the difference between the market value оf your home and what уоu ѕtіll оwе оn the mortgage. Sо, іf your home іѕ valued аt $300,000 and уоu ѕtіll hаvе $260,000 outstanding оn your mortgage, your equity would bе $40,000.

    Home equity loans, typically called a HELOC (Home Equity Line of Credit), are secured in second position against the property, after your first mortgage.

    With mоѕt HELOCs, уоu саn borrow uр tо 65% оf the amount оf your home’s equity. Fоr the case аbоvе, with $40,000 іn equity, the homeowner could borrow up to $26,000 to put to good use.

  • What’s the difference between a HELOC and LOC?

    Many people confuse the two. A Home Equity Line of Credit (HELOC) is better suited for a specific large expense like a home renovation and it is secured against the equity in your property.

    A conventional Line of Credit (LOC) is not secured and it is better suited if you need to access varying amounts of money for ongoing expenses.

    Because a HELOC is secured against the value of your home, it typically has a significantly lower variable interest rate. An LOC, on the other hand usually has a higher fixed rate.

    Pros of a HELOC:

    • Provides low-cost credit for important expenses
    • Unlike a mortgage, interest is compounded on simple interest on the monthly balance and you only have to pay interest monthly – though it's suggested you also pay down the principal over time
    • Tax deductible if you use HELOC funds to invest in mortgages or rental property purchases

    Cons of a HELOC:

    • Not everyone can qualify as you must have enough equity in your home to qualify for two mortgages – your initial one and the HELOC
    • In extreme cases, if the market slows or drops, you could end up owing more than the value of your home or if you overspend, you could risk losing your home
  • What are the associated fees?

    Here is a summary of costs you can expect to incur to refinance or get a second mortgage:

    • Home appraisal fee
    • Legal fees for both the private lender and you the borrower
    • Title search
    • Title insurance
    • Lender fees
    • Mortgage broker fee

    I can help you not only secure a second mortgage but ensure associated costs are as low as possible.

  • Beware of pitfalls

    Some unscrupulous lenders lure people into refinancing with what the industry terms “no-frills” mortgages. Homeowners often don’t realize that these products often lack repayment privileges, which help you pay down your mortgage more quickly, and can incur crippling early cancellation fees.

    I can help you avoid these pitfalls and secure the mortgage best suited to your specific situation.

  • Interested in learning more about how you can benefit from the long-term savings and other benefits of a HELOC or refinancing of your mortgage? I can help. Give me a call today at 416-697-5443 or email me at [email protected]

  • Here's what one of my clients says about how I've helped them refinance their mortgage:

  • I recently refinanced my principal residence and one of my investment properties, using Amina's Mortgage Services. Working with Amina was a great experience, she took the time to understand my needs, and managed to get me great mortgage rates and terms. Amina is very knowledgeable in regards to mortgages and real estate investment in general, and she is a great resource to have on your team of professionals. As well, Amina is very well connected in the real estate world, and she went out of her way to connect me with a great property manager and lawyer. If you are looking for a solid mortgage agent, I recommend contacting Amina for your mortgage needs.

    R Visser