Tracy Valko was recently interviewed by The Globe and Mail on the ins and outs of mortgage refinancing. Check out a snippet from the article below!
Tracy Valko, principal mortgage broker, and owner of Valko Financial Ltd., based in Kitchener, Ont., says many people who refinance today opt for variable-rate mortgages, with interest currently as low as 1.45 percent. They can usually lock in at a fixed rate with the same lender down the road, without fees or penalties.
“It’s hard to know where interest rates are going to go,” she explains. A variable-rate gives you time to see what’s going to happen with the economy and “let the dust settle.”
Valko suggests that clients use their interest savings and any extra funds they may have saved from reduced lifestyle costs because of the pandemic to aggressively pay down their mortgages through lump-sum or “privilege” payments. At the same time, many people now working from home, or spending more time there, are looking to renovate or add on to their places, she says, and they see this as a good time to break their mortgages to do that.
In such cases, “make sure that you have a game plan,” Ms. Valko says. For example, with home renovation projects, contractors can suddenly require much more money, which can be a mess if the homeowner has already broken the mortgage, set aside the funds, and established a new one. And while interest rates are low and improvements can increase the value of your property, “you still want to pay off your debt,” she says.