RENEW YOUR MORTGAGE THE RIGHT WAY!
If you are contemplating renewing your mortgage then you should really consider the opportunity that is before you. There are many things that may have changed since you first took out the mortgage. You may be looking to use your home equity to fund a renovation project on your home. Alternatively, you may want to use that equity in other ways, such as purchasing a cottage or holiday home. You may also want to make some long-term investments to secure your future.
There is also the option of putting your other high-interest debts into your mortgage when it is up for renewal. This is one way that Canadians are able to reduce their debt and save on interest payments. In fact, there are many ways to save money when you renew your mortgage.
Saving Money with Your Mortgage Renewal
There are three basic things you need to do to get the best deal on yourmortgage renewal. Be prepared, create a plan, and set an early meeting with a broker.
This means dont be caught off-guard when your mortgage comes up for renewal or you will miss the opportunity to get the best rate and one that suits your needs. You can start talking with lenders a couple of months before your mortgage is up for renewal. Keep in mind that the longer you wait, the less chance you have to save money.
Create a plan
Before you start talking to your broker about renewing your mortgage, decide what you want to do. Consider the best way to use the equity you have earned on your home. You can also take the opportunity to change mortgage lenders. There is no need to stay with your current provider. A mortgage renewal presents a chance to find a lender who better fits what you want in a financial institution.
Meet a broker
Before you decide on whether to sign with your current lender or switch to a new one, meet with a mortgage broker. These are professionals who can offer you advice based on your unique situation. They can also help you find better lending terms if that is what you are looking for.
While it can take a little extra effort on your part, getting a mortgage that works for you is worth the effort. It is important that you are prepared when you renew your mortgage so that you can make the most of the equity you have. This means you need to be ready on your renewal date, have a clear idea of what you want to do with your equity and set a meeting with your broker well in advance.
Call me today if youd like to save money on your next mortgage renewal! 416-568-5111
Forecast Update: Economies Shutting Down
Rapidly evolving developments necessitate an update to the forecasts we published just last Friday. Additional quarantine or shut-down measures have been put in place in a number of countries in the last few days. As a result, we now anticipate global GDP growth to be 0% in 2020, followed by a sizeable rebound in activity in 2021 given our view that economic activity will rebound quickly once the virus is no longer a serious threat to public health. At present, we believe activity will begin to return to normal in the third quarter, except in countries where containment measures were aggressively deployed in the first quarter (essentially the Asian economies), where activity resumes in the second quarter. In Canada, the closure of non-essential business in Quebec and Ontario announced earlier this week will have large economic consequences. At present, we believe Canadian economic activity will fall by 28% in Q2 as these measures are felt. If other provinces follow, the fall in Q2 economic activity would be in the 35% range. We now assume that economic activity resumes by the start of the third quarter and that growth rebounds sharply at that time. However, the 20% drop in US economic activity in the second quarter will restrain the rebound in Canadian activity in the third quarter owing to the usual lags between US and Canadian economic outcomes. Under these assumptions, Canadian GDP would fall by slightly more than 4% in 2020 and rebound by 5.1% in 2021. Though we have not included any additional measures in this update beyond those already announced, we believe a substantial ramping up of fiscal support measures in Canada is forthcoming. There is a chance that aggressive virus management measures are required beyond Q2 to ensure the virus is truly well-contained. Evidence in Asia this week suggests that even in countries where aggressive management measures have been put in place, COVID-19 can come back quite quickly. If measures in Canada are not lifted by the end of Q2, growth would fall again in Q3, and GDP would fall by 6.3% in 2020 instead of the 4.1% we currently expect. A key question for forecasters is the length of the virus-related restrictions on firms and households. As noted above, a shift of one quarter in the resumption of normal operating conditions can have a large impact on growth outcomes. Since we do not have a good handle on the ultimate length of the interruptions, we consider it more informative to assign probabilities to the time at which virus containment measures end. At this time, we believe there is a 75% chance that activity resumes by Q3 and a 25% chance that activity returns to more normal levels by Q4. How officials manage virus containment internationally, as well as the evolution of the virus, will inform our assessment of probabilities going forward.
Source: Scotiabank Economics
Home resale market was gaining momentum prior to Covid-19
At the national level, resale home prices were gaining momentum in February. The 0.4% monthly gain in the Composite index was double the average of the previous ten years for a month of February. In particular, after 12 consecutive monthly declines, Vancouver HPI rose in each of the last five months, reflecting the fact that Vancouver resale market recently returned to balance. Sure, we still saw weakness in other regions, such as the Prairie Provinces (Alberta, Manitoba and Saskatchewan) where markets were still favorable to buyers. But CREA just reported a rather generalized increase in home sales in February, including for Calgary and Edmonton. Unfortunately, then came the outbreak of Covid-19 and its impact on oil prices and disruptions in the supply chain. The unprecedented sanitary measures imposed by the authorities to tackle the pandemic will severely impact business activity and jobs over the coming months. In that situation, the home resale market should be heavily curtailed for the coming months.
Source: Teranet Inc., and National Bank of Canada