How To Cut The Worry Out Of Your Mortgage.

There are many reasons for a homeowner to choose to refinance. Some think that withdrawing some of their home equity is a bad idea, little do they realize that home equity is the most accessible and under-utilized asset in Canada.

With property values jumping year after year many homeowners find themselves property rich but cash poor and are struggling to meet their financial needs. In any given year 30%-40% of our clients will contact us for advice, resulting in changes being made to their mortgage before the end of their original mortgage term. Refinancing is not a Bad word… It simply means paying off your existing mortgage and beginning fresh with a new one, giving you the power to choose!

The options are extensive.

Right now we are experiencing all time low interest rates, so choosing a long mortgage term might be the right option. It would allow you the security of a low mortgage payment and could be a good choice, that is… if you are not planning to move in the next few years. Mortgage funds are CHEAP! Compared to most borrowed money, mortgage interest rates are very low.  Compare a 5 year mortgage rate of 2.49% with credit card interest rates (17%-24.5%) and you can easily see the savings. With many lenders now granting amortizations of up to 35 years monthly payments can be reduced, freeing up cash so you can live your life.

Refinancing is also the time to withdraw some of the equity in your home allowing you to re-allocate funds. Many mortgage holders have entered a new life stage since obtaining their current mortgage which often affects household finances.   Common uses of funds include;

  • Debt Consolidation; Roll several debts into one monthly payment with a low interest rate, this can provide you with the option of making the minimum monthly payment when need be and give you the flexibility to pay as extra funds when are available. Many lenders offer significant pre-payment opportunities.
  • Funds for investment; this could be your chance to Invest in a second home, an Income property, a recreational property or to assist children with their own property purchases.
  • Renovate your home, though moving may be appealing it is costly and not always the best option. I enjoy watching shows like “Love it or List It?” and for some the benefits of renovating their existing house to a home they LOVE is the most equitable.
  • Liberate funds for Life events – For each of us these are different. From helping with the purchase of a first car through paying for an education or helping to pay for a wedding, often there are not enough funds to celebrate life’s important milestones.
  • Take that Long awaited vacation – Don’t wait too long to take that trip… There are some things in life that just cannot wait. It may be that you have been putting off a dream and now is the time to experience ” La dolce Vida”.

Refinancing can be a smart choice in managing your assets and debt. At the end of the day a refinance should provide you with a net benefit and peace of mind. When strategising rely on good advice to achieve your financial goals!


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