What is the maximum refinance amount?

The easy answer to this question is 80% LTV. What does that mean? It means that if your home is worth $100,000, then the maximum mortgage that you can have on that home when refinancing is $80,000. The reason it is capped at $80,000 Is because in Canada if Your mortgage exceeds 80% of the value of the home, then the government mandates that the mortgage is insured by CMHC, Genworth or Canada Guaranty. A refinance is classified as uninsurable so an institutional lender will not exceed this amount.

The long answer to the question what is the maximum refinance amount isWhatever the lender is willing to risk. In order to go beyond 80% loan to value, one needs to exit the conventional lenders and look to Private Lenders. Generally speaking, the way to exceed 80% LTV, One usually involves an institutional lender for the first mortgage and then a private lender for the second mortgage that exceeds the 80%. Since the equity in the home is greatly reduced and there is no insurance, this poses a greater risk for the Private Lender and so they become very expensive. Usually a private lender will charge a lender fee and a higher Interest rate and the borrower is responsible for the legal fees of the lender’s lawyer and the borrower’s lawyer. Additionally, it is common for the mortgage broker to charge also a separate fee Called a brokerage fee.

Robert Floris has been in the mortgage industry for 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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