Mortgage Refinancing in Canada

Mortgage Refinancing in Canada

Mortgage refinancing in Canada has increased sharply over the last 24 months. Canada Mortgage and Housing Corporation (CMHC) statistics from 2006 state that just over 70% of mortgage borrowers decided to refinance when their mortgage renewal came due.

Another interesting statistic from the Canadian Association of Accredited Mortgage Professionals 2008 survey claims that five out of six mortgage borrowers that did refinance, did not use a mortgage broker; meaning they did not shop around first! They simply used their current bank or lender. That means over 80% of mortgage borrowers likely paid more than necessary for their mortgage. Doing a bit of research would have saved them thousands of dollars over time from accrued high interest.

How does a mortgage borrower ensure they are getting the best rate and mortgage product for their mortgage refinance? Before shopping around, follow these simple guidelines and have your personal information readily available to make it easier when actually applying for a refinance through the mortgage broker.

1. Ensure your credit is accurate and in good standing. Don't miss or make late mortgage payments on your existing mortgage because a new lender may request a report from the previous lender detailing your repayment history.
2. Know what you want and understand your own needs. Don't be afraid to ask a mortgage broker for advice. Some borrowers hear about unique products or services and choose to apply for them when they might not be the best options. Many borrowers make this mistake and end up changing their mortgages or re-applying not long after their mortgages are set up.
3. Education is the key. Mortgage borrowers don't need to be economists or accountants, but should understand what they are looking for and what is being explained to them by the mortgage broker. If you don't understand everything about the mortgage product being discussed, ask questions or request other options from your broker.
4. Comparison shopping is vital in the current marketplace. Mortgage rates are always fluctuating so don't assume what you were quoted is the best product available that day. Do not assume you have the best rate or term unless you have documentation to back it up. A solid commitment from a reputable mortgage broker or brokerage will give you peace of mind.
5. Most people don't think about the significance of insurance when discussing mortgages. Life insurance, house insurance, title insurance, etc. are completely different types of insurance with different parameters of coverage. It is best to review your entire financial situation, so you can evaluate all of your options and make an educated decision when it comes to purchasing the right insurance. Don't discount the importance of it and don't make a decision on it unless you fully understand what type of insurance coverage is provided and how it protects you. Most people know what life and house insurance is, but title insurance is not as widely known. For example, title insurance covers the homeowner in the event of fraud committed against the home/property on that land title. More and more over the last five years, many homeowners are susceptible to fraud on their home because it is hard to catch until the act has already been committed and the damage is done. This is why title insurance is so important and why most lenders in Canada now insist that it is part of the transaction. The title insurance coverage doesn't stop at fraud protection because it also covers against property easements, survey irregularities, heir claims and more.

Alberta Equity has helped over 50,000 people find and qualify for the best mortgages in Canada for over ten years. We do all of the heavy lifting and ensure that you get the best mortgage rates and product features available. Apply online for a free, no obligation consultation.