The sudden economic impact and the unexpected loss of income caused by the Coronavirus pandemic have stirred waves of panic and anxiety around the world. With many of our finances affected, a lot of mortgage owners are now struggling with loan repayments or are even considering hitting pause on paying all together.
As mortgage interest rates have hit an all time low and are probably going even lower, many people are thinking that refinancing your mortgage could be a smart move.
Something to consider, though, is that many of the big mortgage companies are now tightening their lending standards to protect themselves from the increased market volatility and borrower default.
This means that you’re not necessarily getting the best deal.
A good mortgage broker in Vancouver can help you find the best solutions for getting the financial relief you need.
We don’t shy away from complicated situations, and even though the Coronavirus pandemic might have left you unemployed or with credit challenges, we will still do our best to offer you a product that best suits your mortgage needs.
Is Now A Good Time To Refinance My Mortgage?
You might be asking, is now a good time to refinance my mortgage? We’ve been hearing this question a lot during the last few weeks. Since none of us know what the future might bring and the uncertainty regarding our incomes is creating a huge stress in our life, there has been word on the street that refinancing your mortgage with your bank could offer you a lower interest rate, which in turn would lower your monthly payments too.
What better way to take some breath and relax, don’t you think?
As the COVID-19 pandemic continues to affect the consumer financial services, the Canandian mortgage market has been badly battered too. The increased demand in mortgage loan refinancing, all time low interest rates and unexpected unemployment or layoffs for borrowers, have made it all more difficult for those thinking of getting their hands on some cash by refinancing their mortgage.
What makes the process so difficult you might wonder?
To keep it short, some the main reasons which might turn refinancing your mortgage into an unsuccessful strategy right now are:
- The applicants’ income and employment are more rigorously scrutinized
- Delayed or much lower appraisal valuations than expected
- Lender Cutbacks in Maximum Loan-to-Value Ratio
Refinancing Your Mortgage Is Not The Only Option
Getting a mortgage if your income has been impacted due to COVID-19 or you have been left without any income whatsoever should not be an impossible dream. When working with us to meet your financial needs, whether it is getting a home equity loan, a second mortgage or a bridge loan, will be a fast and easy process.
We know quite well that no two mortgage needs are the same. After discussing with you in detail and consulting our lenders, we will present you with the best solution to fit your particular situation.
Having a less than ideal credit score is not a cause of worry when you’re a client of ours. The private lenders we collaborate with don’t take your current income or credit issues into consideration. Instead, we focus primarily on the equity you have saved up in your home. Approvals are fast and easy, and often take less than 24 hours!
Alternative Solutions To Refinancing Your Mortgage
Unlike the Big Banks which are having a hard time adapting to the chaos caused by COVID-19, the process of working with a private lender is still as easy as before, allowing you to access a variety of flexible private lending options:
Home Equity Loans
Instead of refinancing your mortgage, if your income got impacted by COVID-19 and you own a property, a private lender can help you consolidate debt and increase cash flow by simply accessing the equity you have saved up in your house. The amount you can borrow is based solely on the amount of equity you have in your home, and doesn’t take into account your income or credit score as in the case of banks.
Our lenders have no restrictions on how you might use your mortgage, so whether you want to pay off a loan, your credit card debt or even make home renovations, that’s up to you! One more thing you should consider in favor of taking a home equity loan instead of refinancing your mortgage is the IRD penalty. Interest Rate Differential or IRD Penalty is a penalty you would need to pay for breaking your obligations with the bank. When working with A-Lenders, a fixed mortgage term will not allow you to make any changes like paying out or refinancing during your term. Penalties can be quite large in these types of situations, which makes working with B-lenders more desirable.
When working with the best lenders in Canada, second mortgages are just as easy to get as the first one, and they are a great alternative to refinancing your existing mortgage. A second mortgage is a new loan you can take, based solely on the same home ownership title, which allows you to refinance up to 70% of your home’s value. As in the case of home equity loans, a second mortgage can free up money for your working capital, can give you more cash flow during the coronavirus crisis, or can assist you with payments over the term of your mortgage. It is a great tool too for repairing your credit.
A bridge financing loan allows you to access the equity in your current home for buying a new property. Banks don’t do this type of financing but we do! Moving out from your old house before taking possession of your new one will not need to be a reason to stress anymore, and you can even have money left for renovations and buying furniture.
Looking to consolidate debt into one low payment? With the equity you own in your home it’s easy to do that too. As the debt is secured against your ownership in the property, our lenders can offer you attractive low interest rates that you can choose to pay at your own pace.
If you are still thinking if now is a good time to refinancing your mortgage, and you are not yet convinced that an alternative solution could benefit you more, why not give us a call or contact us through our online application or email.
One of our brokers would be more than happy to assist you and answer all your questions!