Real Estate Refinancing Is A Good Option or Not?

[Vemmanath Vasudevan]

I am new in Canada and want to know more about the refinancing as an investment option. What could be the golden rules to follow for getting mortgage while refinancing? Any suggestion for buying your first home and refinancing is also appreciated.

[Moises R Cosme]

Vemmanath, the question is a little confusing; are you asking if re financing an existing mortgage is a good option?  Or are you asking if it is a good option to cash out an existing property with equity to purchase an investment property is a good option?  

In general, the manner in which the mortgage is amortized will tell you if you should refinance or not.  As an example, if you have a mortgage that amortizes over 30 years and has front loaded interest refinancing in years 1 - 4 is probably an awful idea (80% of the payments you make during that period go to interest, so you are simply resetting a mortgage with very little principal having been paid down).  

With anything in finance it is all about looking at the repayment schedule and attempting to use money efficiently.  I hope this helps!!!  If it does, please give my post a vote.