Traditionally, the CMHC did not allow the additional funds to be used for debt consolidation. But recently it has changed and now you are able to get CMHC insured mortgage for up to 90% of the home equity for refinancing, and you can use the additional funds for debt consolidation, debt reduction and any other purpose. Read on to know the benefits of taking a mortgage for refinancing.
- You can purchase another property: If you have got home equity, then you can cash out your home equity through refinancing. Use the extra money as a down payment for the purchase of another real estate property.
- You can finance education: With the rising costs of schools and educational institutions, it is very important to secure the future of your children. With the new changes in the CMHC insured mortgage refinancing, you can refinance a mortgage and use the money to obtain good education for your children. Home equity may be the cheapest option to assist yourself in securing your child’s educational future.
- You can consolidate multiple mortgages: With mortgage refinancing, you can consolidate multiple mortgages into one with lower interest rate and extend the term of repayment. This is an easier option than paying the installments of two or more mortgages together.
- Higher Loan-to-Value ratio: Another benefit of using a mortgage for refinancing is that it facilitates more access to equity in your home. The loan-to-value ratios range up to 90% for 2-3 unit residential properties.
- Lowers interest rates: By refinancing your mortgage, you can lower the interest rates on your mortgage and hence enable yourself to repay the loan in an affordable manner. Decrease in the interest rate leads to lower monthly payments thereby making the repayment option easier for you.
- You can pay off other debts: By refinancing your mortgage, you are able to apply the additional funds in paying off your other debts. It may be credit card debt, car loans or any other expenses. By refinancing the mortgage you can save a considerable amount because now you can reap the benefits of lower interest rate.
With mortgage refinancing in Canada, you can have access to flexible refinancing options which allows you to access the equity in your home and helps you achieve your financial goals.
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