aDiamondMortgage – The Difference MortgageTM
Do you know what your refinancing options are?
Refinancing a mortgage in Canada can be a powerful financial tool to help homeowners achieve better terms, reduce monthly payments, or access equity for other purposes. Refinancing involves replacing your current mortgage with a new one, either with your existing lender or by switching to a new provider.
Switching lenders at the end of your mortgage term is often penalty-free, but it may involve fees for transferring the mortgage. When switching, you may not need to necessarily qualify and provide documentation such as proof of income, property insurance, and your current mortgage details.
Refinancing also allows you to adjust your loan terms—such as extending the amortization period for lower payments or shortening it to pay off your mortgage faster. Additionally, refinancing can unlock home equity for renovations, investments, or consolidating debts. Whether you’re refinancing or switching, working with an expert ensures you find the best rates and terms tailored to your financial goals.
When your circumstances change, consider aDiamondMortgage to go over the various lenders that we work with who can support your needs.
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The main differences between refinancing with the current lender and switching to a new lender are:
Purpose and Process
- Refinancing: Involves obtaining a new loan to replace the existing mortgage, potentially with modified terms, rates, or loan amounts. This can be done with either the current lender or a new one.
- Switching: Primarily involves transferring the existing mortgage to a new lender without substantial changes to the loan terms.
Timing
- Refinancing: Can be done at any time during the mortgage term.
- Switching: Typically occurs during the mortgage renewal period to avoid penalties.
Costs and Fees
- Refinancing: Often incurs various fees such as closing, appraisal, and application fees.
- Switching: May involve minimal fees associated with transferring the mortgage, such as discharge fees from the existing lender and set-up fees with the new one.
Flexibility in Terms
- Refinancing: Allows for adjusting various aspects of the mortgage, including loan term, interest rate type, and loan amount.
- Switching: Usually maintains the remaining loan term from the original mortgage, with changes primarily to the interest rate and lender.
Relationship Considerations
- Refinancing with current lender: May offer benefits like waived fees or rate matching due to the existing relationship.
- Switching: Provides an opportunity to find a lender with better services, terms, or rates that align with your financial goals.
Approval Process
- Refinancing: Typically requires requalification based on current lending criteria, regardless of whether it’s with the current or a new lender.
- Switching: Also requires approval from the new lender, but the process may be simpler if done at renewal time.
In both cases, it’s recommended to shop around and compare offers to ensure you’re getting the best deal for your financial situation.
Get your complementary Pre-Approval
from aDiamondMortgage, here
Take control of your financial future by
Scheduling An Appointment, with us today, here.