Refinancing condo loan?

[Mike71]

I am about 3 years into a 5 year Mortgage with Royal Bank. I think its ammortized over 25 years but I have to renew after 2 more years. I have racked up a bit of debt and I would like to refinance my mortgage with 20,000 extra added to the principal. Will my bank let me do this? Should I contact a mortgage broker instead? What are my options? I'd like to avoid paying any early termination penalty on my mortgage obviously but maybe that won't be able to be avoided. Any suggestions/info are greatly appreciated.

[ynot]

Your bank may allow you to, and likely use a blended rate (combo of old and new rate).

[rdarkman68]

Consider a secured line of credit if your condo has increased or similar value as in the past. Basically, any value of the condo minus the outstanding loan is your money on paper. They can let you use that to open a secured line of credit, and rates are very good if you do that.

Good luck.

[bar777]

A secured line in one way but banks will only provide a secured line on the difference between the principal and 75% of the value of your property. Example if your property was worth 100K and your mortgage was 50K you could get a secured line for 25K. The mortgage and the line would equal 75% loan to value. Note: You will also have to pay some legal fees to register the line. PM me if you want more info as I do this for a living.

[Hubster]

Your lender should not have a problem doing this as long as your personal situation allows for the increased mortgage numbers to work (ratios). See here for Mortgage Calculators (http://www.invis.ca/_bin/calculators/calculatorCentre.cfm)

It will all come down to Loan to Value (LTV). Most lenders, and their insurers, will allow you to refinance up to 90% of the current value of your home. They will complete an automated appraisal of comparable homes in your neighbourhood and if the stated amount of your homes value falls in the same general price range, the appraisal is approved. No physical appraisal will be required under these circumstances and at no cost to you.

The lender should offer you whatever new mortgage product you are interested in if they plan to continue to enjoy your business: fixed,, variable, amortization, etc. As you are currently three years into a five year term, there should be no bank charges for you to stay with them. If they disagree, threathen to take your business elsewhere.

If you do refinance, a lawyer will have to 'close' the new mortgage on your condo as these are legal documents which need to be registered. But it will be much cheaper than your original purchase closing.

Will 90% of your perceived current value suffice? If not, there are other "alternative" lenders who will allow you to borrow up to 100% of the property. But be aware that the rates climb steeply, lender fees will definitely apply and you will have to pay for your own appraisal. Also be aware that some lenders have limitations on condos: LTV, etc.

So to recap:
Max LTV of 75% with Line of Credit
Max LTV of 90% with traditional financing
100% LTV with alternative lenders

GL


note to bar777: there are quite a few of us RFDers who "do this for a living". kindly refrain from hunting down potential clients on here, especially on your first day :!: this is an information gathering forum, not a trade show. show a little class man. :mad: