• Refinancing “for dummies”. Is this you? Unsure if you should refinance?

    In the mortgage world there is no better feeling than helping first time homebuyers or helping clients refinance with a purpose. This is how we helped Jackie with her situation.

    Jackie’s Story

    I met Jackie one morning to listen to her current mortgage situation. She was a referral from our previous clients. She came in with a happy face and tons of energy. Quickly I realized how wonderful a human being she was. As Jackie relayed her story and I took notes, it quickly impacted me that her happy demeanour might not be so truthful. I asked her politely and with curiosity how she was managing the debt? She exploded in tears. It was not easy and indicated it was affecting all aspects of her life including her health, her relationship and her work.

    Jackie Doesn’t Need Us Anymore

    We helped her understand credit and cash flow principles that major Canadian lenders would never do. Jackie has fixed her credit and cash flow and more importantly her stress levels. She does not need us anymore, but she still calls when she has a question.

    Let’s review the basics of a refinance

    Are you the client going to be better off? As a client, you must be selfish. Will I be better off financially, physically or structurally with the house?

    1. Is it cost-effective? this answer can be now, but it also can be for your future. Example: clients refinance their house after the last stock market crash. For those astute clients they have doubled and in some cases tripled their money.
    2. Am I going to be better off for a long period? Like Jackie, fixing her cash flow and getting in lifelong money principles will serve her forever. Renovating a home to add value when you might be moving is not smart. Again it Hass to be long term.
    3. Will I save money by reducing interest costs. There are times when getting under poor credit products make total sense. If you could say yes to most of these questions, you may be an ideal client.

    Reasons to refinance (remember the basics of a refinance must lead you here)

    1. Consolidate debt. This will improve your cash flow.
    2. Renovate or remodel home. This will be your home and you want to add value.
    3. Lower rates and overall costs
    4. Remove stress levels. Financial issues is a leading candidate in relationships.
    5. Take equity out for: A. Investing B. Retiring C. Kids education.

    Again, I want to emphasize these points:

    • Be selfish
    • Will you be better off?
    • Is it a long-term decision?

    By saying yes, you will realize the decision is based on your needs and not the lender.

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