Refinancing: Who qualifies?
If you want to add debt to your mortgage, to stretch the amortization or the loan term, little red flags go up at the bank. “You have to qualify to change the rates, amounts and terms of a mortgage ” says Ottawa mortgage broker Frank Napolitano.
Whether you're looking to refinance your mortgage for a lower interest rate, to consolidate debt, to renovate your home or to switch from a variable to fixed rate, the process is very similar to applying for a first mortgage.
This article from the Financial Post, featuring Frank Napolitano, is an informative look at what you will need if you are looking to make changes to your existing mortgage.
First and foremost, a good credit history is a must. Your mortgage payments should always be made in full and on time, as well as payments to any other credit products in your name. You should be able to produce documentation that shows your income can support payments to all of your debts. If you are extending the amount or amortization of your mortgage, it is important to have equity in your home. If you are looking to consolidate your debt, pay your mortgage faster or shorten the amortization period, you will need to show you have access to the funds that will enable you to do this.
For more information, read the full article from the Financial Post here.