Today, this blog is for all my wannabe investors out there who are looking to refinance their homes. So Mr. Eric Fabien and Mr. Marc Menard will be joining me today.

Kevin: So guess we'll start off with a simple question, what is a refinance?

Eric: You know, we've talked about it for a long time when the house prices have gone up, so did the house that you own right now. So the value of your home is higher. So a lot of people were taking advantage of that situation and refinancing their home to purchase a cottage, to purchase an investment property, to be able to pay off some debt that they occurred, credit cards, loans, car loans, whatever the case may be.

Marc: Your kid’s wedding.

Eric: Life event. Literally can be anything, really that you're sitting on this equity that you could use to benefit you in several ways. So ideally, the refinance is taking some equity out of your house and taking that money and, you know, doing something with it. And so you can refinance up to 80% of the value of your home and decide, what kind of money that you want to take out, according to your budget? That's essentially what the refinances are.

Marc: If I could just add a tiny little bit to what Eric said, everything he's saying is absolutely accurate. But a refinance is also a great tool to improve your cash flow, to say you have a $700 car payment, a $400 line of credit payment, so on so forth. And adding $30,000 or $40,000, your mortgage to pay these things off, will increase your mortgage payment only by a very, reasonable amount. So you can easily increase your cash flow in this situation by $600-$700 every month.

Eric: Now, of course, when you're looking at credit cards that are 21% interest, loans that are a 12% interest, you know, if you could bring it down and put that in your mortgage, it gives you a lot of cash flow as well and monthly, but it releases the stress. I think that's a big one, and when somebody is tight on the credit cards to be able to relieve that stress, I think is a big one as well.

Kevin: Yep. So when we're talking about refinancing and someone looking at buying an investment property, could they use that money as an actual downpayment?

Marc: Absolutely 100%. And that's something a lot of people are leveraging now with the equity they've built in their house, just because of the market we're in and wanting to jump back into the market and but maybe not having the cash necessary for the downpayment. So it's a great tool to buy an investment property. So if your house is worth $600,000, you owe $300,000 on it, you can go up to 80% of $600,000. So that gives you $180,000 there where you can use that purchase a rental property. So that's basically how it works is that you're taking the equity out of your home. So either through a mortgage or home equity line of credit, you get that approved, at the same time, there is a joint application for the rental property that you're looking to purchase, or cottage or second home vacation home, whatever it may be, but specifically rentals. And so you get approved here and you get approved there at the same time. You don't have to worry about downpayment because basically, your current house is your down payment. So it's a tool that a lot of our clients have used. And it's been super successful especially if they did it a year and a half or so ago when the housing market really took off and there are no real signs of it slowing down just yet. So yeah, that's basically the workaround there and on top of that, you're borrowing against your property at a very low-interest rate because interest rates are all-time lows right now. You're getting your rental at also a low-interest rate, and you're getting the appreciation of the house and you're paying down a mortgage and you're getting rent and all that. So it's a fantastic tool. If you have some equity in your house.

Kevin: I know this has helped me and many of my clients buy more and more real estate. Great tool for sure.

Eric: Make your money make your money.

Kevin: 100%.

Eric: Utilize the equity that you have right now if you can.