Real Estate and Refinancing in Vancouver
If you own a home in Vancouver, you must be well aware of the recent surge in your property value. As a result, many homeowners are investigating their options for refinancing.
Here are some of the benefits to refinancing:
- It can allow you the opportunity to free up some cash and pay off bills, or consolidate your debt into one payment, with one interest rate;
- Purchase an additional investment property or fund some home improvements; and
- Reduce borrowing costs on your current mortgage by switching to a mortgage with a lower fixed or variable rate.
Here are some of the options available to you when you are considering refinancing your home:
- Break your existing mortgage contract. You would do this if you want to end your existing mortgage contract in favour of a new one with a different lender. This is an attractive option if you can find a lender with a lower interest rate but beware of early termination penalties. The penalties can be high and this should be a strong consideration when choosing to end a mortgage contract early.
- Blend and extend your existing mortgage. Your existing mortgage lender might offer you a blended rate, which is a blend of your current mortgage rate plus any additional money you borrow at current market rates. One of the issues with the blended rate is that the rate is typically higher than the majority of competitive mortgage rates available on the market.
- Add a home equity line of credit. This is a great way to use the equity you have built up in your home and is one of the most cost effective ways to lower your borrowing costs. In many cases, home equity loans and lines of credit can offer you a lower interest rate compared to other types of loans. Also, you can usually access a home equity line of credit through you existing lender.