If you’re burdened with crippling debt, it might be time to consider a move to refinance debt into your mortgage. It may seem like a frightening and complicated ordeal, but with the right lender, the process is simple and can improve the quality of life for you, and your loved ones.
The process of refinancing high-interest debt into your mortgage with a much lower interest rate means it leaves more money in your pocket each and every month.
The process of refinancing debt into your mortgage is quite simple, you must have equity in your property in order to complete a mortgage refinance. You can only refinance to 80% of your properties current appraised value. This new number has to replace the existing mortgage and still have room to add in the debt you want to eliminate.
Here is an example of what your mortgage advisor can do for you:
Based on the example of the loan to value above:
If your home is valued at $410,000 you can take out a maximum mortgage of $330,000.
Current mortgage balance $300,000 rate of 3.39% and amortization of 25 years = $1480 payment per month
Use $30,000 towards payout of credit cards, auto loans, renovation projects or investments. As well as covering the closing costs for the new mortgage.
Refinance mortgage to $330,00 rate of 2.89% and amortization of 25 years = $1543 /month. This is only an increase of $63 / month to your payment.
Refinancing also gives the option to access the extra funds for home renovations thus increasing your property value, pulling money out to buy investments or topping up your RSP’s.
When you refinance debt, it allows you to arrange a new mortgage in a variety of different ways. You can choose a variable-rate mortgage, fixed-rate mortgage, HELOC or a portion fixed and the remaining HELOC.
Working with our trusted Mortgage broker Eva Neufeld, she will guide you through the cash out refinance process.
Mortgage Tailors are your top 3 Edmonton Mortgage Brokers specializing in refinance debt solutions.