Many people are currently worried about the Mortgage interest rates increasing along with rising inflation. Is now the right time to refinance your mortgage? With rising costs and the interest rates increasing, people are wondering how this will affect their financial future
We have been helping people refinance their mortgage for many years and with the increased value in their homes, it is incredible how much equity they have. Unfortunately, many people are not taking advantage of this equity as they don’t really understand the benefits of refinancing their mortgage and how it will improve their family’s financial future.
This is the story of one young family that we have helped recently. Is now the right time to refinance your mortgage?
A single mother of 3 teenagers was referred to us. She is a successful software engineer and recently had to replace her roof and pay for emergency plumbing repairs. She did not have an emergency fund or enough savings set aside for unexpected costs like these. She had no choice but to use her line of credit and credit cards.
She is very worried about how she is going to pay this debt down and build her savings up again.
Before the pandemic, she was putting an extra payment of $1,000 per month down on her mortgage, as her parents had taught her how important it was to pay off her mortgage. While this may have been beneficial during times when mortgage rates were very high, like they were in the 80’s, the rates now are much lower and we recommend you pay down your high interest debts first and invest your money where you can earn much higher interest rates.
This was her financial situation:
Home Value: $950,000 – Niagara Property
|All Other Debts||$106,000||$2,180.00||*|
|Current Total Monthly Payments||$3,730.00|
*Debts: Car Loan, Credit Cards, Lines Of Credit with varying interest rates up to 24.9%
New Financial Blueprint
This lovely family needed financial help to reduce their high interest debt and to set up an emergency fund. It made sense to consolidate her high interest debts and to take advantage of the equity she had in her home by refinancing her mortgage at a much lower interest rate.
The Blackmore Levy Group is a full-service Financial Brokerage specializing in Insurance, Investments, Mortgages, Estate Planning and all Debt strategies. We help you build or re-build YOUR Financial House the right way!
We arranged a new first Mortgage and paid off all her outstanding debt, resulting in one lower monthly payment.
NEW Monthly Payment of $2,175.00 = A SAVINGS of $1,555.00 per month.
The New Blueprint outlines exactly what to do with the freed-up money, which puts the family in a better financial position for their future. This is what we implemented:
- Life Insurance – Set up an individual Life Insurance policy, aside from her group policy at work, in the event that she changes her job, her individual insurance policy will stay with her, so she can always protect her family.
- Will and POA’s – She updated her Will, since it had not been updated since her divorce
- Set up an Emergency Fund – So she does not have to rely on her line of credit or credit cards for unexpected expenses
- She invested money for her future, into her RRSP and she will be getting a tax refund. We also set up monthly contributions to take advantage of Dollar Cost Averaging
This customized Blueprint was a huge relief for her, as she now has money left over at the end of each month and she can continue to enjoy life without the financial pressure she had been feeling. We were able to put a smile back on her face which is always rewarding.
Is Now the Right Time to Refinance Your Mortgage?
Are you struggling with financial challenges and not sure what to do? We at the Blackmore Levy Group would love to help you. Please call us for a FREE, private and non-judgemental conversation at 1.888.520.6520, or connect with us here. Let us help you smile again.
If you liked this case study, check out some of our other articles:
Are You and Your Family Struggling with Financial Challenges? See How We Can Help!
Our 4 Tips to Build Your Financial House Now and Protect Your Family