Cost of Refinancing Your Home | Diamond & Diamond Real Estate Lawyers
  • Tuesday, 27 November 2018

What is the Cost of Refinancing Your Home?

When you’re looking at refinancing your home, you should always do so with the appropriate background knowledge about all the costs associated with it.

There are pros and cons to refinancing your mortgage and you can also discuss these and the general process with your real estate lawyer.

Reasons for Refinancing Your Home

You might look into refinancing your home in order to access the equity you have built inside the home or to obtain a lower interest rate.

Although this might be the best financial solution for you, it is critical to consider the cost associated with opting for a refinance before determining that it is the right choice.

Through refinancing your home, you will be eligible to access up to 80% of the property’s value, reduced by the outstanding balance on your mortgage.

Whatever your reason, you should know what you can get out of the process as well as some of the ways that it might impact your future financially.

Two Ways to Refinance Your Home

There are two different types of refinances available in Canada: one at the end of the term and one within your term.

While you may be eligible to take equity out of your home or access a lower mortgage rate while still in your mortgage term, you could be charged a pre-payment penalty.

You may also have to pay a mortgage discharge fee if you are switching lenders. This is typically between $200 or $350. Regarding the pre-payment penalty, this could be equal to the interest rate differential or three months’ worth or interest.

If you need help figuring out whether now is the time to switch your approach to real estate, set aside time to talk to an experienced Canadian real estate lawyer. 

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