This is when you take out a new mortgage to pay off an existing one. The most common reason to do this is to save money. For example, you might be on a two-year fixed rate and find your payments go up (normally to the lender’s SVR) after the fixed period ends. At this point you may want to consider remortgaging to get a cheaper rate. Some people also remortgage in order to borrow a larger amount so they can pay off their debts or pay for home improvements.

After you refinance with us once, we may waive the lender fees and reimburse appraisal fees on any future refinance with DCANS Mortgage. Instances when refinancing and remortgaging will make sense:

• Your income has increased

• You need to consolidate debt

• The equity in your home has increased

• You need money for a major expense

• Your credit profile or rating has improved

REASONS TO REFINANCE

Lowering your rate and payment is just one of many great reasons to consider refinancing your loan. Have you thought about converting your current adjustable rate into a 30-year fixed rate mortgage loan? How about pulling cash out of your equity to remodel your bathroom or put in new floors? With attractive rates and loan programmes, now may be the best time to make a move.

1. Refinancing can lower your rate and payment.

This is one of the most common reasons for a home mortgage refinance. If your current interest rate is higher than what is currently available in the market, it is probably a good idea to see how much you could save by refinancing. There are no-cost and low-cost options that could save you money with little to no investment.

2. Refinance to convert your adjustable rate into a fixed rate.

Adjustable rate mortgage (ARM) loans are a great way to ease into your mortgage payments, especially if you are a first time buyer or if you need lower payments initially. Eventually, if you decide you will stay in your home longer, you may want to consider refinancing your mortgage into a long term fixed rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time.

3. Refinance your interest-only loan into a fully-amortized loan.

Like ARMs, interest-only loans are a great way to minimize your mortgage payments at the beginning; however, because you are not paying any principal, your loan balance does not decrease. If you plan to keep your home long term, refinancing can help start paying off your loan. Often, you can refinance your interest-only loan to a 30 year fixed rate loan while keeping your payments about the same. Get started online.

4. Convert your 30 year loan to a shorter-term loan.

Sometimes plans change and the home (and loan) that you thought you were going to have for a while turns from a permanent situation into a temporary one. If you are planning to sell your home sooner than you thought and no longer need a long-term rate, then you may consider converting your 30 year fixed to a shorter term loan programme, which often have lower rates and payments.

5. Take cash out to consolidate your debt.

Leveraging the equity in your home is one of the smartest ways you can make your money work for you. Use the cash from your home to pay off higher interest, non tax-deductible credit cards, student loans, or medical bills. By consolidating your debts, you can enjoy the benefit of having only one payment each month, and in most cases your overall monthly outflow decreases.

6. Take cash out for home improvements.

What better way to use your hard earned equity than to invest it back into your home with repairs or home improvements? Whether you would like to fix your leaky roof or update your kitchen, you can tap into your home's equity and have a tax deductible way to tackle your projects.

7. Take cash out to purchase investment property.

With home prices and interest rates at the lowest they've been in years, if you've been thinking about buying a vacation home or an investment property, now may be a great time to take action. Tap into your home's equity and use the cash for your down payment, home improvements, or for any reason at all.

8. Remove mortgage insurance.

If you purchased your home with less than 20% down, chances are you're paying private mortgage insurance (pmi). Refinancing will help you eliminate the extra expense if you've paid down your loan balance and/or have seen an increase in your home's value to a point where you have at least 20% equity in your home, or a loan-to-value (LTV) of 80% or less.

THE REFINANCE PROCESS

Before you refinance your home, it's important to know how refinancing works, what questions to ask, research what options are available, and determine whether or not refinancing will benefit you. At DCANS Mortgage, we strive to keep you informed every step of the way. To help you better understand the refinancing process, we've listed some of the major steps in the transaction below:

Step 1: Define your goals

One of the most important steps before deciding whether or not mortgage refinancing can benefit you is to determine what your objectives are. Is your goal to reduce your monthly payment or pull cash out of your equity for home improvements or debt consolidation? Are you looking to fix your adjustable rate? Once you determine your goals, you can take at look at the various home loan programmes available to decide which loan option helps you achieve those goals. You can estimate monthly payments with our mortgage refinance calculator or visit our home loan products page to learn about all the options that are available.

Step 2: Enquire online

Once you've defined your goals and researched all the loan options available, you can submit your information online. We'll make sure that you understand every detail of your loan programme and answer any questions you have before moving forward. When you're ready, you can apply online. Get started online.

Step 3: Select your loan programme

If you decide you'd like to move forward with the refinance, your lending officer will confirm your loan programme, rate, and payment and will answer any questions you may have. At this point, you can lock in your interest rate to protect you against any fluctuations in the market. Once your rate is locked, you will receive a lock agreement confirming the terms of your loan and your lending officer will collect a lock deposit fee to finalize the lock. The lock deposit will be credited towards your closing fees at the end of the transaction.

Step 4: Submit your documents

After we receive the signed lock agreement and lock deposit, your lending officer will provide you a list of items to e-mail so that we can verify all your information to get your loan approved and closed quickly. We will then contact you to schedule the appraisal inspection. It is important to schedule the appraisal appointment as quickly as possible to prevent any delays in your closing.

Step 5: We'll handle it from here

After we receive all your documents, your assigned Account Manager will contact you to go over the next steps, which includes opening escrow, ordering the preliminary title report, and coordinating with all the necessary parties to ensure your loan progresses smoothly and quickly. Once we have everything we need, your loan file will be submitted to the underwriter for review and formal approval.

Step 6: Close your loan

Upon approval, we will contact you to schedule a loan document signing appointment. This appointment will generally take 30 minutes to an hour and can be done at the convenience of your home or at an approved settlement location. After we receive the signed loan documents, we will close your loan approximately 10-14 days later. Then your monthly savings will begin or you'll receive the cash for your home improvement project or to consolidate your debt.

COMMON REFINANCE QUESTIONS

1. Should I refinance?

To determine whether or not it is a good idea for you to refinance, you should look at your specific situation and your motivation for refinancing. The most common reasons are lower refinance rates and/or payment, convert from an adjustable to a fixed rate, or a cash out refinance to consolidate debt or improve your home. If your objective is to reduce your rate and payment, you should review your current interest rate and see how much you can save and then determine if it makes sense to reduce your rate further.

If you are converting your adjustable rate into a fixed rate, you may actually see an increase in your rate and payment but you'll get peace of mind knowing your rate will never increase again. If you are using the equity in your home to consolidate debt, your overall loan balance and payment may go up, but you will save monthly because you will eliminate the monthly obligations that you are paying off. Your mortgage lending officer can run some numbers for you and help you determine whether or not refinancing makes sense for you.

2. How does refinancing work?

Before you refinance your home, it's important to know what questions to ask, research available loan options, calculate refinance payments and determine whether or not refinancing will benefit you. Once you decide that refinancing will help you, be sure you understand the process so that you know what to expect.

3. Can I refinance with bad credit?

Depending on the reasons why your credit is imperfect, there are great loan options available with us. Contact us to determine whether or not you qualify for one of our programmes.

4. How much can I save if I refinance?

Every situation is different. It depends on what your current interest is and what your motivation is for refinancing. If your current rate is higher than what is available in the market, it probably makes sense to refinance. To get an idea of what you could save by refinancing, check out our payment savings calculator in our mortgage calculator page and input numbers specific to your situation or contact us for some expert advice.

5. What if I have a second mortgage on my home? Can I still refinance?

Typically, any second mortgages are paid off through the refinance. We will consolidate both loans into one new first mortgage and you will only have one payment each month. If you'd prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance the first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.

6. Am I allowed to refinance if my property value is less than what I owe?

There are options that may allow you to refinance your loan even if the value of your home is less than what you owe. Contact us to see if you qualify for one of our programmes.

7. What are the costs associated with refinancing?

Fees associated with refinancing vary from lender to lender but there are standard fees that are typical across the board. These fees include 3rd party fees such as credit report, title, escrow, notary, and recording fees. Other fees include the appraisal fee and lender fees such as processing and underwriting. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowners insurance (if applicable). If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.

8. What type of documentation do I need for refinance?

Standard documentation collected for a refinance transaction includes information regarding your income such as payslips covering the most recent 30 days and SSNIT Statement for the last two years, asset information such as bank or mutual fund/stock statements covering the last 60 days and current loan information such as your most recent mortgage statement and homeowners insurance declarations page.

9. How long is the refinance process?

Most refinance transactions could take up to 45 to 60 days based on the complexity of the loan. DCANS Mortgage has built a smooth and seamless process, enhanced by our proprietary paperless technology that enables us to close loans faster than the average industry turn-times. As long as you do your part in delivering the documentation that we need in a timely manner.

10. What happens at the loan closing?

Depending on where your property is located, you can either sign in your home or at a designated settlement location. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier's cheque to pay the closing fees and other applicable closing funds unless you decided to finance the closing funds into your new loan. Once the loan documents are signed and delivered back to us, your loan will close in 7 to 14 days. If you are pulling cash out of the equity in your home, you will receive your funds 10 to 14 days after your loan closes.