Different types of mortgage refinancing in Ottawa

• Cash-out refinances: In this type of refinancing the borrower takes out a new property loan on their property for a larger sum than what they owe on their primary mortgage loan. Afterwards, they will receive the difference between those two loan amounts in cash.

• Cash-in refinances: In cash-in refinancing the borrower puts a large sum of money into the refinancing process rather than withdrawing it. By paying down a significant portion of your mortgage balance, you will reduce your LTV (Loan-to-value) ratio, and in doing so, increase the percentage of equity in your home. This can result in lower monthly payments or a lower interest rate.

• Rate and Term refinance: A rate and term refinance enable the borrower to change the loan terms and interest rates of an existing mortgage. It is a beneficial option when interest rates are lower and you as a borrower have the opportunity to pursue more favourable terms with your mortgage lender.

• No-closing cost refinances: As a borrower, you will not have to pay the closing costs upfront. Instead, the costs are covered with a higher interest rate on the loan. They can also be rolled into the principle. This type of refinancing is a great option for those who only plan to live in their home for a few years, as well as for anyone who wants to access the funds normally that are used for closing costs to manage expenses in other areas of life.

• Short refinance: In the odd case if you defaulted on your mortgage and your property is at the risk of foreclosure, this is the ideal refinance option for you. With this type of refinancing, your lender with replacing your existing mortgage with a loan with a reduced balance. You can then pay a small monthly repayment that you can afford and easily pay back your mortgage.