Refinancing Considerations

by Kelly
(Gibsons, BC Canada)

Hi Tom and Nick,

First I want to thank you for your awesome newsletter that you send out - I look forward to your dialogue and the helpful tips each week.

I'm a relatively new investor and have purchased two properties in the past two years. I plan to hold on to them indefinitely providing they continue to provide cashflow or barring any major changes in my life.

The mortgage terms on both properties end and are up for renewal in 2016. Between now and then, I am planning to begin a couple of businesses that focus on real estate and stock market investing, and move on from my full time job that I've had for the past 10 years.

My question is that if my employment situation is dramatically different (I'll be self-employed or a business owner as opposed to a full time employee), will that make it difficult for me to get my mortgages renewed and is there anything I should prepare for between now and then? I'm assuming if I've made all my mortgage payments on time and I stick with my current lender then I should be able to renew no problem? Or what if I want to go with a different lender?

I'd appreciate any advice you have. Thanks in advance!

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Dec 13, 2012
 RE: Refinancing Considerations...
by: Tom Karadza

Thanks for the questions (and the feedback!) an congrats on the properties!

We're excited for you. Seems like big things are ahead!

If you have an existing mortgage in place then we've never seen a situation where you must "re-qualify" at renewal time.

You just automatically renew by signing some papers confirming the new term of the mortgage. We've gone through this process many times ourselves over the years.

You should still be able to negotiate with your bank to get a better rate than the default one they'll have on the renewal paper for you.

But if you choose to take your mortgage to another bank then you'll have to re-qualify and it will be more difficult for you being fairly newly self-employed (we've been there!).

Remember, we're not the bank and not mortgage brokers so you can't take our word as the final answer on this. This is just what we've seen over the years.

Perhaps call a mortgage broker and get their opinion as well so you're getting multiple answers on this.

Hope that helps!!

Tom.

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