The cash-out refinance closing process in Canada involves a few steps to help you secure a new mortgage and access the equity in your property. Here is an overview of what you can expect during the closing process:
Apply for the mortgage
To start the process, you will need to apply for a mortgage by providing your personal information and supporting documents. Together we choose the best lender for your situation and submit the application to them. The required documents may vary depending on your situation, but generally include proof of income, your current mortgage statement, property tax statement, and insurance documents.
Mortgage approval and appraisal
After you submit your application, the lender will send back an approval. Usually, the approval is conditional on an appraisal being done on your property to determine its value. We will order the appraisal and the appraisal results may affect the loan amount of the new mortgage being arranging.
Sign mortgage approval documents
The next step is to sign the mortgage approval documents which is a requirement for the lender to move forward.
The lender will then send mortgage instructions to your lawyer or to First Canadian Title (FCT), a closing company that acts as your lawyer.
Your lawyer or FCT will order a discharge statement from your current mortgage lender(s) to confirm the exact amount required to pay off your current mortgage in full on the specified closing date.
Signing with your lawyer
Prior to the closing date, you will have a signing appointment with your lawyer. At this appointment, you will review the details of your new mortgage and the mortgage charge to be registered on your property.
On the closing date, the lender will send the funds for your new mortgage to your lawyer or FCT, who will use the money to pay off your current mortgage, as well as any debts that have been arranged to be paid out with the new mortgage proceeds. Any remaining funds will be deposited into your bank account. Your lawyer or FCT will also handle the legal side of the transaction, such as registering the new mortgage on the property and discharging the old mortgage.
Summary of the Cash Out Refinance Closing Process
Overall, the cash-out refinance closing process in Canada involves applying for a new mortgage, getting it approved, signing the documents, and closing the deal by paying off your current mortgage and any other debts, as well as handling the legal aspects of the transaction. With the help of a mortgage professional, you can navigate the process smoothly and efficiently to access the equity in your property tax-free.