With summer just around the corner many people are itching to get outside and get started on all the projects that winter wouldn't allow them to start. Maybe it's working on the cabin at the lake, getting the garden ready or building that new deck but either way it's nice to be able to get outside after being cooped up all winter!
This is the busiest time of the Real Estate season probably for a few reasons. It's easier for people with children to co-ordinate moves with kids nearing the end of the school year, holidays and the weather just makes it that much easier. With that being said, many of you may have your mortgage coming up for renewal since you purchased in the spring or summer months. Before you go to see your mortgage specialist sit down and take an assessment of your current financial situation and review your short and long term goals.
Answer these important questions to help prepare for your renewal and possible refinance appointment.
For example:
Current Mortgage at current rate - til end of term = X
New Mortgage at new rate + penalty - til end of term = X
If the new mortgage ends up less then the current mortgage you will offset the penalty. There are other times when a refinance makes sense though. If the reduction in payments is substantial then that will allow the borrower to save for other goals like emergencies or retirement. Sometimes it is just needed due to a life circumstance like wage decrease or illness.
If your mortgage is over 80% Loan to Value which means you are financing over 80% of the value of the home you should talk to your mortgage professional about possibly porting and blending the premium if possible. Sometimes even with the penalty being offset the CMHC/Genworth premium makes the refinance just not worth it.
When you have 20% equity in your home there are many flexibly programs with lenders that allow you to utilize LOC options and Visa's that keep your borrowing costs low. Having this set up and available will ensure that you never pay too much in interest when you have to make a large purchase.
If you are considering moving or upgrading homes refinancing to take equity out may put you in a position where sale proceeds wouldn't be sufficient for downpayment so it's important to be up front with your mortgage professional about your future home purchase plans.
In summary talk to your mortgage professional about what a perfect plan looks like for you.. We tailor to your needs and everyone's situation is different! The great thing is that there is a wide array of options available and we have the skills to put you on the path to the right solution!
This is the busiest time of the Real Estate season probably for a few reasons. It's easier for people with children to co-ordinate moves with kids nearing the end of the school year, holidays and the weather just makes it that much easier. With that being said, many of you may have your mortgage coming up for renewal since you purchased in the spring or summer months. Before you go to see your mortgage specialist sit down and take an assessment of your current financial situation and review your short and long term goals.
Answer these important questions to help prepare for your renewal and possible refinance appointment.
- Am I able to pay all of my obligations now and still save for emergencies?
- Are my debts outside of my mortgage at reasonable rates and will they be paid out in the short term?
- Does this home suit me and my family now and in the long term?
- Are we needing to move for work or family reasons in the near future?
- If I am not at renewal, what are my penalty charges to opt out of my term or blend the interest rate..?
For example:
- Now have equity and want to borrow at lower rate and pay out high interest rate debts
- Renovations
- Investment opportunities
- Purchase another home or rental property
- Simplify and consolidate payments to one payment
- Assist children with Post Secondary Education
Current Mortgage at current rate - til end of term = X
New Mortgage at new rate + penalty - til end of term = X
If the new mortgage ends up less then the current mortgage you will offset the penalty. There are other times when a refinance makes sense though. If the reduction in payments is substantial then that will allow the borrower to save for other goals like emergencies or retirement. Sometimes it is just needed due to a life circumstance like wage decrease or illness.
If your mortgage is over 80% Loan to Value which means you are financing over 80% of the value of the home you should talk to your mortgage professional about possibly porting and blending the premium if possible. Sometimes even with the penalty being offset the CMHC/Genworth premium makes the refinance just not worth it.
When you have 20% equity in your home there are many flexibly programs with lenders that allow you to utilize LOC options and Visa's that keep your borrowing costs low. Having this set up and available will ensure that you never pay too much in interest when you have to make a large purchase.
If you are considering moving or upgrading homes refinancing to take equity out may put you in a position where sale proceeds wouldn't be sufficient for downpayment so it's important to be up front with your mortgage professional about your future home purchase plans.
In summary talk to your mortgage professional about what a perfect plan looks like for you.. We tailor to your needs and everyone's situation is different! The great thing is that there is a wide array of options available and we have the skills to put you on the path to the right solution!
