Many homeowners who are considering mortgage refinancing have approached the brokers at Canadian Mortgages Inc. to inquire about what a cash-out refinance is. Unlike a conventional mortgage refinance, a cash-out refinance provides you with more money than you need to pay off what you owe on your home. For example, if you owe $50,000 on your home and refinance your mortgage for $70,000, you have an additional $20,000 that you can use for:
The brokers at Canadian Mortgages Inc. work with many different lenders that provide our clients with competitive refinancing rates and terms, and we will negotiate on your behalf for the most favourable cash-out refinancing solution.
As with any type of mortgage refinancing, a cash-out refinance could be subject to additional fees, and a CMI mortgage broker can evaluate your budget and goals to help you determine if the benefits of a refinance are worth the extra costs.
First of all, a cash-out refinance is subject to the standard mortgage fees that apply to any mortgage, which cover things like:
And if you are considering refinancing before the expiration of your current mortgage, you could have to pay a prepayment penalty for paying off your mortgage early. However, you can avoid this added cost by refinancing at the end of your current term.
Finally, cash-out refinancing is often subject to higher interest rates than a conventional refinance, but CMI has years of experience and network-building with our lending partners, who offer our clients the most competitive rates available, which are often much lower than what you would get through a bank or traditional lender.
A cash-out refinance provides homeowners with an alternative to home equity loans and lines of credit, but there are several differences between these two loan products. First of all, a cash-out refinance actually replaces your existing mortgage, while a home equity financing product is a separate loan in addition to your mortgage. Secondly, a cash-out refinance will often have a lower interest rate than a home equity product, but a refinance could be subject to prepayment fees that are not associated with home equity financing solutions.
If you have more questions about what a cash-out refinance can do to improve your personal financial situation, book your free consultation with a CMI broker today. Our mortgage experts have the experience necessary to help you plan for the future, and can get you a low-rate cash-out refinance that will provide you with the extra money you need to finance your goals.