Tapping equity without pushing the problem down the road
Equity can fix a cash-flow problem or just delay it. Rolling debt into the mortgage lowers the payment. But a balance you would have cleared in three years, stretched over twenty-five, costs more interest in the end.
Add up what it really costs
Set the penalty, the fees and the new term against the monthly saving. Divide the penalty by that saving. If the answer is more than the months left in your term, you lose money on the move.
Look past today’s payment
After a refinance, the payment has to hold up at the next renewal too, not just today. Ask yourself what it becomes if rates are higher when the new term ends.
Documents to gather
What the lender will ask for.
Balance on your mortgage
Value of the property
Debts or project to fund
Penalty on the current mortgage
What the new payment would be
Equity you can access
Frequently asked
Which documents should I gather?+
Your last two notices of assessment, recent pay stubs, an employment letter, three months of bank statements and proof of your down payment. Incorporated owners also need two years of financial statements and the business records. Line everything up before an offer goes in. Short financing windows are only realistic that way.
Current rates
Today’s rates, with the fine print.
These rates are indicative. Yours depends on your file, the type of mortgage (insured or not) and the lender. And look at the penalty too, it matters as much as the number.
Buying, renewing, refinancing, or something a bit out of the ordinary: tell us where you’re at, even if it’s still fuzzy. Mathieu gets back to you with next steps and the documents to pull together.
