Below are the different types of Refinance finance programs:
Existing Mortgage
Customer is refinancing existing mortgage with the existing lender, or is looking to refinance and move the mortgage to a new lender. In particular, a person may wish to convert a Homeowner’s or Personal Line of Credit into a standard conventional mortgage. This may reduce debt burden or increase convenience for the client. Please note that standard mortgage fees/expenses may be incurred (e.g., legal, appraisal, admin, etc.)
Debt Consolidation
Customer would like to take two or more debt facilities (e.g., 1st and 2nd mortgage/1st mortgage, personal loan, credit card balance, etc.) and combine them into a new first mortgage or new 1st and 2nd mortgage combination. This can dramatically reduce both the number of monthly payments incurred and/or reduce the monthly personal debt load by increased amortization. No additional cash is freed up from this transaction--just a restructuring of the existing debt. Be sure to confirm that the existing debts allow payout without adverse penalties to the client.
Home Improvement
A customer’s sole motivation to obtain or refinance the existing mortgage with their current lender or a new lender is to finance the improvement of the existing property(ies). Be sure to get sufficient details and documentation regarding the improvement project.