Here at Butler Mortgage we take the time to analyze different home refinance scenarios so that we can determine what is the cheapest and most effective way to harvest your home equity for your renovation needs. Many Canadian’s are investing money in their current homes, adding new basements, new kitchens, increasing master bedroom and en suites size are the most common renovation.
So how does Butler Mortgage help you with this process? Butler Mortgage finds the most effective way to access the valuable equity in your house to supply the required funds to start and finish your home renovation.
Here are some of your options to raise funds:
- Refinancing your existing mortgage into a new mortgage!
- Secured Line of Credit
- Equity Based Second Mortgage
Rates: All the rates currently posted on Butler Mortgage are available to you. These rates may be lower than the rate that you currently have with your bank, therefore saving you money on your overall mortgage payments! And in most cases, the cost of the renovation may even balance out over 5 to 7 years against what you save, thus not really costing you anything!
Interest Compounding: All of these mortgages are compounded semi-annually; meaning your interest is compounded twice a year.
Fees: Butler Mortgage charges no fees for these mortgages. Legal fees and appraisal fees may be included in the mortgage advance; this means no out of pocket expense.
Payment options: All payment schedules are available; monthly, semi-monthly, bi-weekly, bi-weekly accelerated, weekly, etc.
Secured Line of Credit:
Rates: If your line of credit is secured against you house, rates can be as low as bank prime 3%! But an unsecured line of credit can be as high as prime plus 5% or 7%
Interest Compounding: Interest is compounded monthly or 12 times a year!
Fees: If you do not have a line of credit in place, costs incurred may include appraisal fees and in some cases a set up or administrative fee.
Payment options: Although you can pay as much or as little at any time on your line of credit, payments are always based on a monthly minimum. This is where the banks tend to take advantage of you by only requiring you to make a small minimum monthly payment. If you pull out $40,000 and make only minimum payments, it could take you 50 years to pay off, more than twice the time it would take to pay off the longest mortgage amortization.
Rates: 2nd Mortgage rates start at 8.50% and can be as high as 17%.
Interest Compounding: Usually set at a monthly compounding but can be semi-annually.
Fees: Almost all 2nd Mortgages have fees, by the lender and by the mortgage broker. Mortgage brokers will normally not get paid by the lender so a fee by the broker is usually applied. Overall fees can be as high as 10% of the total mortgage advanced. For a $50,000 mortgage the fees could be as high as $5,000 this amount is taken off the advance of the mortgage. Meaning you will pay interest on funds that you never see.
Payment options: Most 2nd Mortgages have monthly payments only. In some cases they will allow you to have bi-weekly payments.
As you can see, there are many options when it comes to finding financing to renovate your existing home. Ontario Equity recommends refinancing as your best option and will help you to find the best mortgage rate and mortgage terms available.
Fill out our easy to use online mortgage application and enjoy living in your new home, rather than worrying about how you are going to pay for it!