There are two situations where a borrower can break their current mortgage and move to a new lender.  One is a Direct Switch and the other is a Refinance.

With a Mortgage Switch, you are not adding on any more funds to the mortgage and the remaining amortization (length of time to pay down the loan) must be the same or less than the existing mortgage.

There is no legal cost to a switch and an appraisal is typically not required.   If there is a penalty to pay out the existing mortgage, up to $3000.00 can be added onto the new switch mortgage.  If the penalty is more then $3000.00 the borrower can pay the difference, or we can change the mortgage to a refinance.

A Mortgage Refinance is where the borrower is adding on more funds to the new mortgage.  The amortization can be extended too.  The new funds could be to consolidate debts, take out money to renovate, funds for a down payment on a new property, pay for Child’s university,  or add on a secured line of credit.  If we were planning on doing a switch but the penalty is greater then $3000.00, we can then treat the mortgage as a  refinance and on the full penalty costs.

From a cost perspective refinances do require appraisals and there can be a legal closing cost of roughly $800.00.  These costs are blended into the mortgage.  Some lenders can sometimes cover the legal cost depending on the product and time of year, a Spring Promotion for example.

With rates at an all-time low, a lot of clients are switching or refinancing just to obtain a better interest rate and lower their borrowing costs.  This is fine and can make sense.  It is just about doing the calculations.

Contact us today for your customized mortgage solutions.

The Reverse Mortgage is the fasted growing mortgage product in Canada over the past 4 years. 

A reverse Mortgage is geared towards borrowers aged 55 years or older who need to access money or cash flow by using the Equity in their homes but cannot qualify for a traditional mortgage based on income etc. Under a Reverse Mortgage no mortgage payments are required over the life of the mortgage. A borrower can choose to take out the funds as a lump sum or monthly distributions. The mortgage does not have to paid back until the borrower sells the home or leaves the home. A misconception is that a Reverse Mortgage will eat away at all the equity in the property. The interest on the loan will increase over time (you can choose to pay the interest on the loan each month) but so will the equity as property values increase. The equity in the home today should be the same or greater in 10 or 20 years with a Reverse mortgage in place.

A lot of older Canadians do not live the lifestyle they want or cannot give to there kids or grandkids. Why not access those funds now and live the lifestyle you want or give to those who you love when they need it.

Sometimes a borrower may have investments that he or she does not want to touch or cannot access at a certain time. A Reverse mortgage can step in to cover the funds needed rather than breaking up the investment portfolio. Some costs that a Reverse mortgage can help with are 

• Pay for home improvements or repairs on a property,
• Cover your regular expenses,
• Top up monthly income,
• Pay for travel,
• Pay for healthcare expenses,
• Pay-off existing debts,
• Help your children or Grand Children with an early inheritance

In this current low rate environment, a Reverse Mortgage can make a lot of sense.

The Reverse Mortgage is the fasted growing mortgage product in Canada over the past 4 years.

A reverse Mortgage is geared towards borrowers aged 55 years or older who need to access money or cash flow by using the Equity  in their homes but cannot qualify for a traditional mortgage based on income etc.  Under a Reverse Mortgage no mortgage payments are required over the life of the mortgage.  A borrower can choose to take out the funds as a lump sum or monthly distributions.  The mortgage does not have to paid back until the borrower sells the home or leaves the home.  A misconception is that a Reverse Mortgage will eat away at all the equity in the property.  It is true that the interest on the loan will increase over time (you can chose to pay the interest on the loan each month) but so will the equity as property values increase.  The equity in the home today should be the same or greater in 10 or  20 years time with a Reverse mortgage in place.

A lot of older Canadians do not live the live style they want or cannot give to there kids or grand kids.  Why not access those funds now and live the life style you want or give to those who you love when they need it.

Sometimes a borrower may have investments that he or she does not want to touch or cannot access at a certain time.  A Reverse mortgage can step in to cover the funds needed rather then breaking up the investment portfolio.  Some costs that a Reverse mortgage can help with are

• Pay for home improvements or repairs on a property,
• Cover your regular expenses,
• Top up monthly income,
• Pay for travel,
• Pay for healthcare expenses,
• Pay-off existing debts,
• Help your children or Grand Children with an early inheritance

In this current low rate environment a Reverse Mortgage can make a lot of sense.

Please reach out with any questions.

There are a couple of options for the down payment for the purchase. You can use other investment assets if available, potential borrow from a friend or family member or use the Equity in your existing home by way of a Secured Line of Credit.  A secured line of credit can be added to your existing home for the down payment.  When you do eventually sell the home you then pay down the line of credit which is completely open.

I have implemented the secured line of credit strategy for a lot of my clients, so If things are not going to plan when trying to sell your home do not panic! We have options.

In my experience it is best to look at all the possible scenarios when setting up your mortgage pre-approval for the purchase, so you are prepared.  This will give you a piece of mind that you have a back up plan if needed

It typically takes two different lenders to implement this strategy, one for the line of credit refinance and one for the purchase mortgage so therefore another advantage to working with a mortgage broker who can access both lenders at the same time.

Contact me to find out more and to discuss a lending strategy for YOU.