As we approach spring, many Canadians feel like this time of year is an opportunity for a fresh start. The worst of winter is behind us, and we have warm and sunny days ahead. This is the time of year when we start to regain some of our energy levels and look forward to what’s to come. Should refinancing this spring be something to consider as part of the new season? Here’s what you should know!

Common reasons to refinance

Homeowners could have several reasons to consider refinancing this spring. Our mortgages have such a big impact on our lives that it’s smart to ensure your product is always meeting your current needs and situation. However, there are a few common reasons people often have for wishing to refinance. Below, we outline three main examples.

Your needs have changed

This can mean a bunch of different things, but in some way or another, many people who refinance find their mortgage isn’t meeting their needs anymore. This doesn’t mean you chose the wrong product or rate when you secured your mortgage! It simply means that over time, your life has changed and now it’s time to update your mortgage terms as well. For example, you might want to shorten your amortization period in order to pay off your mortgage faster. Conversely, lengthening your amortization schedule can help you reduce the stress of monthly payments by stretching them out over time. Perhaps you want to switch your mortgage product between a fixed and variable rate. You may also want to explore prepayment privileges, or rework other existing terms with your lender. Whatever the reason, there are many ways your needs may have developed over time, and refinancing this spring can bring your mortgage up to date.

You want to complete home renovations

Most homeowners, especially those who stay in the same home long-term, decide to complete home renovations at some point. Our tastes change over the years, and parts of our homes may need to be updated, repaired, or replaced. However, home renovations can be quite expensive, making them unaffordable for many people. Refinancing this spring could work in your favour if you have home improvement projects on the agenda. A refinance allows you to access the equity in your home, and turn it into the cash flow required to complete those renovations. Depending on how long you have lived in your home, you might have a significant amount of equity built up. Refinancing lets you take advantage of that equity to support home projects!

You’re thinking about the future

Finally, you can use your mortgage to start planning for the future. You don’t have to use home equity strictly for projects inside the home. If you have the equity and can convert it into cash flow, you can use it for a number of reasons. For example, maybe you have children heading off to post-secondary school, and you’re looking for a way to support them. A refinance can help finance this expense.

What should you know before you refinance?

Before you rush to your lender, there are a couple key things you need to know. First, you should familiarize yourself with current interest rates. Over the past year, rates have been on the rise and homeowners with variable-rate mortgages were seeing their monthly payments increase. The good news is that in all likelihood, the prime rate is set to remain stable for the rest of the year. Those wishing to refinance should know what to expect in terms of market rates and the conditions they will be dealing with. Interest rates may not be the deciding point for your refinance, but it’s important to know where they stand.

Another key point to note is you should be sure your income and employment are in a stable place before refinancing this spring. You likely remember the proof you had to provide your lender about your financial situation when you first secured your mortgage. Now, you will have to show you are still in a good position to support your mortgage if you wish to refinance. Since you want to make a change, your lender will need to know you can handle that change. Make sure your income and employment are still in good shape. You can also chat with a broker if you’re feeling unsure.

Remember to contact a broker first!

Using a mortgage broker is one of the best ways to ensure your spring refinance is successful. You aren’t expected to be an expert on market conditions and mortgage rates, because we are! We can work with you to narrow down your goals, current situation, and potential mortgage options. Brokers can take away much of the stress of refinancing. Before you visit your lender, check in with a broker first!

If you have any questions about your mortgage, get in touch with me!