Cash back mortgages allow borrowers to receive money back after the closing of a home loan. These types of mortgages are perfect for borrowers who could use extra cash during the mortgage process. Contact Canadian Equity to take advantage of a cash back mortgage.
What is a cash back mortgage?
A cash back mortgage is a type of home loan that gives borrowers money back after the loan has been closed. It is possible to obtain a cash back mortgage on either a purchase loan or a refinance. The money you receive from a cash back loan can be in the form of a lump sum or instalments. There is no rule for what the money must be used for, but many borrowers use cash back mortgages to help pay for any fees that may arise during the home loan process, as well as for the costs of moving into and renovating a new home.
How much money does a cash back mortgage provide?
Upon closing, cash back mortgages will provide borrowers with up to 5 percent of the mortgage loan amount. This means that the larger your mortgage is, the more money you can receive from a cash back mortgage.
For instance, if your mortgage is for $100,000, you can receive up to $5,000 back. Meanwhile, if your mortgage is for $300,000, you can receive up to $15,000 back.
What are the benefits of a cash back mortgage?
Purchasing a home can be an expensive process, and cash back mortgages allow borrowers to access needed funds in order to lessen the financial burden. In addition, cash back mortgages can be used for non-home-related costs, such as paying off separate debts or using it for a child’s education costs.
How does it work?
Cash back mortgages are available for a variety of term lengths, whether it be a 5, 6, 7, or 10 year mortgage. They are available to all types of borrowers, regardless if it’s a first-time homebuyer mortgage or a refinance mortgage looking to take advantage of debt consolidation. Cashback mortgages are also fixed for the duration of the loan terms, meaning borrowers don’t have to worry about variable rates fluctuating with the market. Financing is available for both conventional and high-ratio home loans, and repayment of the loan can be set for weekly, biweekly, semi-monthly or monthly. It’s also possible to make prepayments and rapid paydowns without extra fees.
Since cash back mortgages provide borrowers with money back upfront, these types of loans tend to have higher interest rates than standard mortgages. It’s important to remember that while the money provided by a cash back mortgage can be very helpful, it is still part of the home loan and must be paid back.
How do I get one?
The first step is to contact Canadian Equity to speak with a mortgage professional who can help you find a home loan that suits your needs. All applicants must be purchasing or refinancing property on Canadian soil. Keep in mind that the minimum loan amount must be for $100,000, unless it’s a CanEquity renewal or transfer. Also remember that the down payment must be at least 5 percent, with a maximum amortization rate of 25 years. If the loan is for a refinance, only 80 percent of the home’s value may be accessed.