With Jamaica and other markets currently experiencing a higher interest rate environment, many
persons are of the view that now may not be a good time to buy real estate with a mortgage. On the
contrary, because rates are higher than we have been used to, this could present an opportunity for a
discerning buyer to seek out real estate deals, since there may be fewer competing buyers. Arguably, if
you find a great deal, a higher mortgage rate should not necessarily deter you from capitalising on that
deal, if the numbers work. This is especially because you may be able to have your interest rate lowered
eventually, by renegotiating your rate with your mortgage provider or refinancing your mortgage.
Persons considering taking out a mortgage now may be curious about the option of refinancing that
mortgage later, when mortgage rates hopefully come back down. This article will give a brief overview
of the benefits, and process of refinancing. Your real estate is an investment, and refinancing your
mortgage may be a way of optimising that investment.

Refinancing a mortgage entails seeking a new mortgage, generally from a different mortgage company,
to pay off your old one. Persons usually seek to refinance where they are able to get more favorable
loan terms from another lender, or in some cases, their existing lender. These more favorable terms
may include obtaining a lower interest rate, which may reduce your monthly payment or shortening
your loan period which may result in saving interest over the life of the loan, or leveraging the equity
you may have built up in the property to borrow more money for renovations or repairs. Refinancing
can also be used to buy out another owner of the property, which may be necessary, for example, in the
case of a divorce, or it could be used oppositely to add someone to the title of a property, and the
mortgage. If you have several existing loans, you could also look at refinancing as a way to consolidate
them on better terms.

From a legal perspective, the refinancing process will include a lot of the same steps as buying the
property and obtaining your mortgage in the first place. Your mortgage provider will assess your ability
to qualify for the new loan and may request documentation verifying your income. You are also likely to
need an updated valuation report on the property, to ascertain its market value, and an updated
Surveyor’s ID report, to ensure the title to the property does not have any breaches thereon, that may
affect your ability to refinance. You will need to sign new loan documentation, which you should review
carefully, and which will need to be stamped with the applicable Stamp Duty. The new mortgage
provider, through their attorneys, will have to discharge the old mortgage and endorse its new
mortgage on the title to the property, which will attract registration fees at the Titles Office. Owing to
the processing and paperwork required, it is likely that your mortgage provider will charge you
processing fees on the refinancing transaction. It is therefore important to ask for and negotiate any
applicable refinancing fees upfront, to be in a position to conduct a cost-benefit analysis of the savings
you may realise from refinancing, against the costs of refinancing.

As with any real estate transaction, you should consult with your attorney-at-law, and a loan officer to
ascertain whether refinancing your mortgage may be a good option for you, and to assist you with the
process.