Where Are The Interest Rates Going And Is Now The Time To Refinance?
With the outbreak of the COVID-19 pandemic, many industries have taken a hit as they’d been asked to wind down or work from home to reduce interactions that could spread the Coronavirus beyond control. To curb their expenses, many businesses cut down staff or salaries, which has led to the loss of many jobs and livelihoods. These actions have put a strain on many individuals’ spending capacity, especially those with high-interest mortgages and other forms of debt. This has led them to look into refinancing as a solution to ease their financial burden.
However, given the circumstances, should people wait until their mortgage is due or refinance now and pay the penalty?
While refinancing is a great option to lower your debt rate and alter your monthly dues, right now, refinancing comes with a penalty that could be quite substantial, depending on your remaining repayment term. On the other hand, if you are carrying extra debt, especially at a much higher rate and finding it challenging to manage it, it may be time to refinance.
Similarly, as the present interest rates are quite low, you can take advantage of them. If you wait until your mortgage comes up for renewal, the rates could be higher by then. Also, if you are feeling stressed because of all the other debts over and above your mortgage, you might want to consolidate now.
With the COVID-19 pandemic still affecting lives by the thousands and no guaranteed treatment or vaccine currently available, we don’t know how long this will last and how it will affect employment in the future. But, if you wait to find out and happen to be unemployed or working reduced hours or earning a much lower income, refinancing may not be possible for you anymore.
As you can see, the mortgage industry is in flux, and there is a lot of uncertainty. With related industries affected as well, the mortgage business is likely to change in more ways than one. If you look at the real estate business, right now, people are refraining from buying and selling homes as they refuse to move due to the pandemic and financial restraints. This trend is undoubtedly going to impact the way specific mortgage products work.
As a result, you need to become more knowledgeable about the advantages and risks of the mortgage products you need before making a decision. To acquire more information about your mortgage needs, make sure to go over the pros and cons with your mortgage broker. But, when it comes to making a decision, understand that it has to be made on an individual basis, by taking into account what you can afford.
For all the latest mortgage details, reach out to the experts at Centum Discount Mortgage Canada Inc. We provide you with a reliable mortgage broker in Kitchener, Ontario, who will work for you and take care of your best interests. Moreover, our connections with reputable lenders, such as top banks, credit unions, and more, will help you quickly find the perfect financial solution for your unique needs.