Mortgage advance and consel

The term "refinancing" is used in this web site to mean "replacing your existing mortgage" with a brand new one. Following is a menu of options to choose from:

Taking Out Equity From your Home ("Equity Take Out")
Larger than the existing one, but without blending in any other mortgages, in which case it is called an "equity take out", usually to consolidate non-mortgage debt, such as credit cards or loans, or to make improvements to your home.

There are several good reasons for doing this...and a few pleasant surprises, depending upon the purpose and your credit standing.

Consolidate Other Debt
Pay off credit cards and possibly car loans - in fact anything with an interest rate higher than the mortgage rate you can qualify for.

Renovations and Home Improvements
Add to the value of your home by carrying out those long-planned improvements and use the equity in your home to do it.

Consolidating Existing Financing
Presumably to lower the total interest cost. Referred to as simply a "Refinance".

If you have ever had to take out a second mortgage (for instance in the case of consolidation, or because you didn't qualify for a High-Ratio Mortgage) there usually comes a time when you are ready to combine them into a single, low-cost mortgage. There are two different possible situations:

Combining Mortgages
Where the resulting mortgage can be either "high ratio" or "conventional".

Breaking a Closed Mortgage to Transfer to a New Lender
Often a "closed" mortgage actually has a penalty built in which allows you to pay the price and terminate the mortgage, leaving you free to move your business elsewhere.

Refinancing When you Can't Transfer to a New Lender
Held by a private, or little-known lender whose mortgages are not accepted for switch purposes by your new - presumably larger - lender (may be either increasing the balance, keeping it the same, or lowering it) . Also referred to as simply a "refinance".

At the outset, it is important to know that after you have had a high ratio insured mortgage for three years, even if you've extended the term several times - three months' interest is the maximum a lender can charge. This is not then a "closed" mortgage. In a truly closed situation, your current lenders may dig in their heels and refuse to allow you to transfer, at least for a reasonable penalty. Depending upon your reason for wanting to break the mortgage (usually a longer term fixed rate mortgage), there may or may not be an easy solution. Let's look at the several possibilities:

"Blend and Extend" your Current Mortgage
You may want to break your current mortgage and switch to a new lender who's offering you a great rate, but your current lender won't let you out of your Closed Mortgage. This may be your only alternative, but the deal may not look ideal.

Selling your Home and Not Repurchasing
This is a tricky situation, but most lenders have an approach to solving it.