I feel many of us have the tendency to bury our heads in the sand while dealing with (or more specifically not dealing with) our finances.
I also feel the last year of increasing cost of living is catching up with a lot of people. Unwritten cosmic laws somehow coordinate to ensure your vehicle dies when you most need it and can least afford to fix it. Life happens. Employment changes. Unexpected expenses hit. You end up on the hamster wheel of making minimum payments on multiple credit cards.
Lately it seems, many of my conversations are with clients are about looking for ways to reduce their monthly expenses.
One of the fortunate things about being a homeowner in the Okanagan is we have seen substantial increases in our property values year over year. What that means is, provided you qualify, you have options for refinancing your home. Under mortgage guidelines you are able to refinance your home up to 80 per cent of its value.
If you have been told by your bank the numbers don’t work, there are other options.
In between the worlds of chartered banks and private lenders there are alternative lenders who look at applications with a little more flexibility. Their rates are a little bit higher than normal mortgage lenders and they generally come with a one per cent lender fee.
When I say rates are higher, I mean approximately one per cent higher. Some clients get hung up on the difference in rates. However, if you are paying 29 per cent interest on several credit cards where you are never making any headway, it is likely time to take a closer look at mortgage options.
Also, some lenders have specialty mortgage products for clients who have significant equity in their homes or who are self-employed. Again, these lenders are weighing out the overall profile of the client and using flexibility with their approvals.
If you are feeling really tight financially and think you don’t have any options, I suggest you reach out to an independent mortgage broker for a conversation about your options.
Not every lender has options that may work for you, so talking to someone who works with multiple lenders may open up doors you weren’t aware of.
Rather than waiting until you are in dire straights, I suggest you connect with a mortgage professional to look into your options. Being overextended is not a fun place to be.
Realigning your debt may be the right decision to help you sleep at night and give you a much-needed financial reset.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.