Now may be one of the better times to do a financial check up. Society has been shaken up, financial markets are volatile. Prime Lending Rate has decreased from 3.95% to 2.45%. Fixed rates have dropped, the benchmark qualifying rate has dropped & underwriting rules have changed for the better and for the worse in our opinion.
Whenever there is this much volatility there are two areas we see clients being able to take advantage: Mortgage Refinance & Mortgage Renewal.
When you should consider a Mortgage Refinance:
-Want to Access equity
-Reduce borrowing costs
-Extend mortgage term
-Accelerate repayment
-Free up cash flow
-Get pre-approved for future purchase
In a market that has seen rates drop, every single person should understand what rate they have - be it fixed or variable, how much term is left on their mortgage and if there is an opportunity to refinance their mortgage into a better mortgage product.
With that being said, not every person should consider a mortgage refinance.
Examples would include; having a better rate than the current market, not qualifying for a mortgage refinance, having an expensive penalty to break. Even though these clients may not find it the right time to consider a mortgage refinance, they should still come to that conclusion by taking the time to go through the process of understanding what mortgage they have and the associate terms and in comparison to today current market.
Outside of the above examples, if you can access equity (should you want to), reduce your carrying costs, reduce your total interest costs, accelerate your mortgage repayment, free up cash flow to perhaps invest elsewhere be it home or markets or save for a rainy day or consider extending your term while rates are low amongst other great reasons to refinance, now may be a perfect time to refinance and take advantage of the market.
When You Should Consider A Mortgage Renewal
You should connect with your mortgage broker 4 months out from renewal when lenders will allow one to lock a rate. For similar points on why one would refinance a mortgage renewal allows one to negotiate new terms, access equity, change lenders, pre-pay their mortgage, extend their term, free up cash flow, negotiate a better rate and much more...
We often see clients waiting until they get their renewal terms from the existing lender or waiting until the last moment. In that case a client may lose access to rates they could have locked in the previous months. They also risk rolling into an expensive open term rate while switching lenders or even worse a closed term they are unaware of. A mortgage renewal, similar to a refinance is an excuse to do a financial check up and ensure they address any credit needs with the benefit (unlike a refinance) or perhaps breaking an existing term. Your term is coming up for maturity and you have to do something about it.
We are in the process of reviewing ALL our previous clients files and reaching out to our referral sources urging clients to consider a simply financial check in. We think now is a terrific time to understand where you are at with credit and how you can structure it best for the future and while your at it, highlighting when that renewal date is to consider a mortgage conversation
If you would like a free financial check up, we will review your mortgage through all the advantages of a refinance or renewal and provide any feedback we can. We will compare to current market rates, do a free home valuation to understand how much equity is available, review how your paying the mortgage and advise if there are accelerated options available and provide any advise around freeing up cash flow, reducing rates and better structuring your mortgage.