Mortgage broker Kevin Carlson from Regina Saskatchewan explains some new options for cash back mortgages for Canadians in 2020.
A cash back mortgage is when a client is able to receive extra funds back to them during the process of a mortgage. The interest rate is increased slightly to be able to finance these extra funds. The money can be used for anything that the homeowner wishes, like home improvements, furniture & appliances or even to pay off higher interest debt.
In the past, cash back mortgages were not a great deal. The increase to the interest rate was higher than it needed to be to be able to finance the extra cash back amount. However, on April 9th of 2020 two mortgage broker lenders, MCAP & RMG Mortgage, rolled out brand new “Peace of Mind” cash back mortgages that are head and shoulders above the old ways of doing a cash back mortgage.
These new cash back mortgages have 2 big advantages over the previous versions. The first is that the interest rates are not significantly higher than standard mortgages. In fact, I illustrate in this video that when factoring in the extra funds given to the client, the cash back mortgages are a great alternative for those needing extra funds. The second benefit is that if the client chooses to pay the mortgage out early before their term is up, they do not pay the entire cash back amount back like many previous cash back mortgages. They only pay a pro-rated amount based on how long their term is and how many years they had left to go.
If you live in Canada and are looking for mortgage financing, I would be happy to help you. Please feel free to contact me through any of the following means below.
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Kevin Carlson – Mortgage Broker – FCAA Lic. 315902
DLC – TMF – FCAA Lic. 316454