Refinancing your home essentially means that you turn in your existing mortgage in order to get a better deal on a new one. And with interest rates as low as they are, more and more Canadians are understanding that if they’re interested in home refinancing, there’s no better time than now. What they don’t understand exactly is what they need in order to be eligible for it.
The good news is that when you refinance your home, the process is very similar to when you got your first mortgage. The biggest difference is that you’ll now need to have some equity invested into your home, at least 5% for most lenders. The equity in your home is the difference between your original mortgage and its existing balance, or rather, how much you’ve already paid off.
The rest of the home refinancing process should be very much like when you got your first mortgage. You will need to have ready some paperwork including:
- Employment and income verification,
- Any information pertaining to both your debts and your assets,
- The balance in any financial accounts including your chequing and saving; as well as the account numbers for all accounts,
- Title search of the property,
- Copy of the site survey,
- An appraisal (some lenders will require both an interior or exterior appraisal while others will require an interior only,)
- Your insurance policy.
In addition to this paperwork, you will also need to have some information about your current mortgage ready when home refinancing. What you’ll need to have on-hand are:
- The monthly payment you are currently making,
- The balance left on your existing mortgage,
- Any and all information pertaining to your existing insurance premiums and property tax payments,
If you are using a different mortgage lender than your original lender for home refinancing, you will also need to make sure that you have all of the first company’s information – including their names and contact numbers, as well as any contracts or other paperwork they gave you pertaining to your original mortgage.
So now that you know what the eligibility requirements are for home refinancing, what are you waiting for? With rates so low, now really is the time!
