27 September 2010
But still, a lot of Canadians prefer to keep their spare cash because of the fear they may need that money some time later.
According to recent Manulife Bank survey, almost half of Canadians would decide to make pre-payments in case they could “access that money again, if they need to”.
That’s why a readvanceable mortgage can be a good way out. It allows you to re-borrow paid-down principal any time you need it.
This type of mortgage is available for well-qualified borrowers with at least 20% equity in their home. If there’s a chance to find a readvanceable for a similar rate as a regular mortgage, it’s worth thinking it over.
But it’s always important to remember two things about it:
• In this case it’s very easy to spend money, so be sure you’re disciplined enough not to jump over your head.
• If you decide to move a readvanceable mortgage to a new lender at maturity then it should be re-registered. And, of course, you’ll have to pay a lawyer. The main thing here is that a regular mortgage can be switched without any legal fees.