What You Need to Know About Senior Refinance Programs

Our team at Seniors’ Lending Centre is here for you. In fact, we’re completely independent mortgage brokers, paid by the banks and mortgage providers we recommend to our clients! That being said, when it comes to choosing a senior refinance program, it can feel overwhelming if you’ve never looked into how they work. Plenty of folks aren’t sure whether they even qualify. 

Today, let’s fix that in hopes of helping you make an informed, worthwhile decision regarding your investment. In this crash course on senior refinance programs in Canada, we’ll dig into the fundamentals and offer advice on getting started. 

How Do Senior Refinance Programs Work?

Whether splurging on a sleek new sports car, a nostalgic transatlantic ocean crossing, or a beautiful new home, enjoying retirement to the fullest often costs more than what your pension will allow. Heck, you might just need a new roof! Therefore, many senior citizens are taking advantage of refinancing opportunities, which allow you to borrow against your home’s equity to obtain funds. If you’re over age 55 and your debts are minimal, it’s possible that you could be approved under the federal government stress test on just your pensions. It’s better if you’ve paid extra into CPP earnings over the years, as you’ll be able to manage the payments even more easily.

Refinancing agreements act as a loan except, in this case, you’re withdrawing from the amount your home is worth. You can borrow up to 80 percent of this equity and receive a large number of funds with which you can enjoy your retirement or sometimes just on essentials. Travel, entertainment, new vehicles, hobbies, helping children and grandchildren, renovations, and even additional properties are some of the most common uses of funds obtained through a senior refinance program. 

When Do I Need to Pay the Loan Back?

What’s great about refinancing is that the rates are more than reasonable right now, and programs are optimized so there’s no stress over having to pay large sums every month. Therefore, borrowing against your equity essentially respects your income limits. As an example, let’s say that you and your spouse generate around $3,000 a month in pension income together after having paid extra into it over the entire course of your respective careers. We at Seniors’ Lending Centre and the mortgage provider will work with you to ensure you can realistically meet minimum monthly payments, which are typically lower as they take place over 25 to 30 years.  Or we can source interest-only payment mortgages.

Do I Need to Double-Check My Credit Score and Income?

Depending on the credit rating you’ve established over your lifetime, you may or may not be eligible for mortgage refinancing. When considering a senior refinance program in the first place, you should treat it as if you were applying for a standard mortgage all over again; the bank will need to analyze your financial stability to confirm whether the refinancing is risky or realistic in your situation. Not only that, but they’ll need to examine your current income, regardless of if you’re a retiree or not, to determine whether you can make future payments.

How Does Working with a Mortgage Broker Help You Save?

Our goal at Seniors’ Lending Centre is to get you the lowest possible fixed rate, meaning more manageable monthly payments and hassle-free access to the liquidity you need. Working with an experienced mortgage broker on your senior refinance program ensures all your questions and concerns are addressed in advance, and we’ll gladly help you determine whether refinancing makes sense for your needs. We review the files for this demographic every day, and quickly recognize what the options are, and present them to you. Alternative options including CHIP reverse mortgages may be an even better fit! If you’re ready to explore your lending options, our team can help you find a refinance program that can satisfy your needs and fulfil your lifelong dreams. Learn more about our Senior Reverse Mortgage Services !

Ready to discuss your refinancing plans with our team? Contact us today!