Cash Back Mortgages Have A New Place In Re-finance! |
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From experience I can tell you that I have never seen a homeowner say “The only debt I have is a mortgage and I’m in financial trouble”. Most will tell you that they have too many credit cards and loans. Only Banks, Credit Unions and retail stores offer this type of credit. I think the changes that the government implemented were too broad and also a little drastic. The result of the changes caused a lot more Canadians to turn to Consumer Proposal and Bankruptcy. The new guidelines at CMHC have reduced refinances by as much as 40% according to new Quarterly financials. That means that 40% fewer Canadians with insured mortgages have been able to access their own equity to get a refinance. Keep in mind that many Canadians need to pull equity out of their homes in order to cover debts racked up by a job loss, death in the family, divorce and/or illness. Some people just want to take advantage of a lower interest rate but can’t do so because of the loan to value restriction of 85% down from 90% previously. With no other options it could mean being forced out of a home when a tough situation arises. This is where a Cash Back Mortgage can bridge the gap. Since you can only refinance to 85% of your homes’ value under the newest guidelines, why not consider accessing the additional 5% through a Cash Back Mortgage. Traditionally, there is a higher cost to a Cash Back product but given how low rates are currently, you can still benefit over paying with a credit card even if you have a reduced rate of 8 or 9%. Unsecured lines of credit still run about 6-8% in today’s economic climate. If you have been considering a refinance for any of the above mentioned reasons, contact us to understand how the Cash Back Mortgage might be a solution for you. Talk to us. We understand the ins and outs of all mortgages. 866-452-1100 or Apply Now! Elfie Hayes as seen on the CTV National News, Rogers TV, published in RENO & Décor Magazine and profiled in Canadian Mortgage Professional Magazine.
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In the Spring of 2011 the Government decided that Canadians’ needed to curb their borrowing practices when it came to refinancing their mortgages. The thinking at the time was that we have too much debt and we can get into trouble if we refinance that debt into a mortgage.
