A lot can change over the course of your mortgage term – regardless of its length – including your income, debt load and interest rates, to name a few. That’s why it’s important to undergo a free annual mortgage checkup with your mortgage agent to ensure you’re saving as much money as possible throughout your time as a mortgage holder.
You annual mortgage review should include a look at your current mortgage features and how you’re using them, as well as an evaluation of your personal and financial situation to ensure they’re still compatible. For example, if you’re paying a lot of interest each month due to credit card debt or a car loan, you may want to consolidate your high-interest debt into your mortgage and free up cash flow. Or maybe your income has increased, so you’d like to examine your prepayment or lumpsum options. Warmer weather also often means your renovation project to-do list is growing, and using your home equity to finance your renos is often the most cost-effective option.
It’s important to keep in mind that, although mortgage rates have risen this year, they’re still much lower than the rates you’d pay on unsecured debt such as credit cards and lines of credit.
Have you considered a mortgage refinance?
There are many reasons why a mortgage refinance can be a great solution for homeowners. Other popular purposes in addition to the ones mentioned above include sending your kids to school and purchasing another property – such as a vacation home or rental.
If your mortgage term is about to expire, now’s the perfect time to consider freeing up some of your home equity through a refinance because you won’t have to pay extra fees to break your mortgage early.
One of the biggest benefits to working with a mortgage agent is they can crunch the numbers and help you weigh your options based on the penalty amount you’d face to break your mortgage mid-term vs how much you could save between now and when your mortgage is up for renewal. Sometimes it makes sense to pay a penalty while, in other cases, waiting a little longer – ie, closer to the end of your current mortgage term – is your best choice.
Have questions about your mortgage options or wish to book a free review to see if your mortgage is still right for you? Answers are a call or email away!
