If you own a property and need to access money from the property this is called refinancing (often confused with renewing). This often means replacing an old loan with a new one and can be with your current lender or a new one.
Why would you refinance your home?
Accessing the equity in your home to pay for renovations, travel or to purchase an investment property.
To save money. Canadians often miss the opportunity to replace their mortgage with a lower interest rate. This could save you thousands of dollars every year!
To pay off higher interest debts. If you have credit card, line of credit or a car loan it may be beneficial to pay off the debts with a mortgage. Imagine paying off all of your debts with a loan under 3%!
To create financial stability. You can setup access to the equity in your home as a safety net. This can provide peace of mind knowing that low interest funds are available as a contingency.
Does it make sense to refinance a property?
Before suggesting a client should refinance, we evaluate the cost and savings to determine the overall benefit. Even if you can secure a better rate the penalties may exceed the savings.
Penalties, interest rates, legal fees and appraisal costs are all a major considering when refinancing. We approach each situation logically and analyze the best approach to reach your desired outcome. Weighing long and short term benefits before providing advice.
If you are not sure about refinancing contact us today and we will provide you with an easy to understand analysis to determine your savings.
Setting up the Smith Manoeuvre
Refinancing your home can be the first step in making your mortgage tax deductible. We will help identify the best product for your situation and help you build a plan for implementing the strategy.
Keaton has been on the Real Estate Investor Dad Postcast and Explore Canada FI Podcast discussing the strategy with Robinson Smith.
If you have any questions reach out to us today.