Refinancing Your Mortgage
A mortgage is a loan secured on real property (i.e., your home and the land that it sits on). To secure the mortgage, the mortgage document is registered on the title for your property, giving the lender a registered interest in your property.
Most people arrange their first mortgage when they purchase their home. "Refinancing" a property means arranging a new mortgage to replace an existing one. You may do this when the term of your mortgage is coming to an end, or to benefit from a significant drop in interest rates, or to borrow more money (e.g., to buy a cottage property or to finance home renovations).
If you are borrowing from your current lender again, the process is fairly straightforward. Usually, the lender will notify you and request that you attend at the lender's office or bank branch to sign some documents. Some lenders even send you the documents and you sign them at home and mail them back. Tell the lender that you want to consult your real estate lawyer about the documents, to make sure that you understand what you are signing.
If you are thinking about borrowing from a different lender, you will need to apply for a new mortgage with this lender. You may apply to the lender directly or a mortgage broker may help you with the process. Again, you should tell the lender that you want to consult with your real estate lawyer, not just sign the mortgage documents at the lender's office or bank branch.
When you are arranging your mortgage, you may hear the following words: amortization period, interest rate, maturity date (balance due date), principal, term. These words describe various parts of a mortgage.
Depending on where the property is located, you may have to sign the actual mortgage document before it gets registered on the title to your property. In some areas, particularly in many areas of Ontario, you do not sign the mortgage, as it gets registered electronically. Even if you do not have to sign it, you must review all mortgage documentation very carefully to see what you are authorizing someone to register against your property.
Don't just sign the mortgage documents. Tell the lender that you want to use your lawyer for the refinance.