Equity is like having your own personal ‘savings account,’ but instead of being at the bank it is in your home. Basically, it is the money that is created from the difference between the value of your home and the constantly decreasing amount of your mortgage.
The amount of equity in your home is one of the factors that determines the maximum amount mortgage refinancing that can be done by mortgage lenders.
Banks will refinance up to a maximum of 80% of the value of the home, while private moneylenders will allow you to refinance your mortgage up to 95% of the value of your home, providing certain conditions are met.
Mortgage refinancing is a convenient way to reduce the high interest charges and corresponding high monthly payments that are typically associated with credit cards, certain private mortgages, and judgements.
Contact us for a home loan refinance consultation.
Real Life Scenario:
The applicants were seeking to refinance their existing mortgage and consolidate all of their debts into one monthly payment.
The main income earner had a low beacon score of 550 due to high utilization of credit and minor slow repayment. The lender was satisfied with the explanations provided for the credit history and the deal was supported with a strong employment type and good stability.
The lender approved the deal at 75% LTV and provided a full consolidation, saving the client over $2500 a month in payments.
Real Life Scenario:
Applicants were seeking to refinance their existing mortgage and payout a Consumer Proposal. With no current or recently established credit history on their bureaus, the lender underwriter was able to use the repayment on the Consumer Proposal as the established credit history.
The Consumer Proposal payment history demonstrated that the applicants were paying their obligations and this was sufficient evidence to proceed with the deal.
The lender underwriter approved the deal at 80% LTV, which included paying out the existing financing and the remaining balance on the Consumer Proposal.