Refinancing – What’s YOUR Scenario?
We are a few months into the year now, when resolutions are either running strong or are beginning to dwindle. Did you commit to a new financial resolution in 2022? Are you looking at tackling an old kitchen or bathroom and want to take on a reno project? Perhaps you’re looking for some options in restructuring your mortgage in order to help immediate family members? Truth is, there are so many reasons people refinance their mortgage.
What does this mean for you today? For one thing, you likely have extra equity you may be able to access, and with favourably low interest rates it may be the best time for you to look at refinancing your home to allow yourself greater financial flexibility and fulfil whatever dreams you’ve been looking forward to.
In some scenarios refinancing your home may come with a cost, however, in many cases the benefits can far outweigh these costs.
Below are some examples of how this could be beneficial in your situation:
Clients can save an extra $2,215 per month like one couple did, by consolidating all of their high interest debt balances into one small mortgage payment. By doing so, giving themselves access to this extra cash flow will allow them to put more towards their principal and pay their mortgage down even faster.
Becoming an investor
Clients have also invested their extra cash flow and helped grow their investment portfolio, by contributing to their TFSA/RRSP potentially giving a tax benefit come filing time.
Perhaps you’re in an ideal position to purchase a rental property and can use your existing home equity for the down payment, and grow your wealth by becoming a real estate investor.
We’ve all seen an increase in the number of bins on the neighbour’s driveways with home improvements going on, thanks to the inspiration of HGTV. Not only do these improvements increase the value of your home, but they refresh your current living space. Whether it’s giving yourself or your kids a workspace, giving an extra bedroom for your elderly parents, creating open concepts, adding closet space, finishing the basement, can all dramatically improve the quality of living within your home.
Helping your children
Another couple who took advantage of the current low rates, after refinancing their mortgage, have freed up an extra $2,430/month, allowing them to help pay for their child’s college/university costs.
Maybe for you it’s travel, as these last 2 years haven’t exactly been easy to just stay put! Did you know Ontario has introduced a new “staycation” tax credit to boost travel within Ontario and support local businesses?
“Dubbed the “Ontario Staycation Tax Credit for 2022” residents can claim 20 percent of their accommodation such as a hotel, motel, resort, lodge, bed-and-breakfast, cottage or campground when filing for personal income tax and benefit return.
Ontarians are eligible to claim up to a maximum of $1,000 as an individual or $2,000 if you have a spouse/common-law partner or children to see a return of $200 or $400, respectively. This can be for one trip or for multiple trips.” **
Whatever your scenario, mortgages.ca’s team of professionals can assess your situation and help customize a plan unique to your financial scenario, ensuring that in 2022 you’ll be taking advantage of great opportunities and possibilities.
**Resource Global News