2 minute read
FINANCIAL FEATURE: BOLD MORTGAGE GROUP
Reflecting on 2021, Preparing for 2022 and Onward
How to best position ourselves for success in 2022 and onward
As we reflect on 2021, we should have a better understanding of the value of the word “Flexibility”. We all have changed many of our behaviours to combat Covid-19: wearing masks, virtual learning, etc. During this time, the housing market did not slow down. Flexibility allowed for virtual open houses, virtual home closings, streamlined mortgage approvals with the reduced need for in person meetings, etc. Technology and innovations have help us through this difficult time, and in many cases, improved processes along the way. The best way to position yourself for success in 2022 and onward is to continue to embrace your flexibility.
How do we meet our need for Flexibility in our choice of mortgage?
As we get closer to the Bank of Canada’s meeting on interest rates, we always hear the doom and gloom scenarios of rate increase. Many individuals go running for a fixed rate based on headlines and fear while ignoring the flexibility and savings provided by a variable rate mortgage.
Fixed rate mortgages do offer the security of a static payment for budgeting; however, they traditionally have higher penalties when paid out early. Many individuals break their mortgages early to consolidate debts, renovate, move to another home, lower monthly bills, etc. These adjustments to your financial plan can be costly if your mortgage lacks the flexibility to meet these needs. High mortgage penalties do eat away at your equity if you plan to refinance as you will have less in proceeds to meet your goals (renovations, consolidate debts, etc.).
A Variable rate mortgage has the flexibility to accommodate life’s unexpected events. By having a low mortgage penalty, you can make adjustments to your financial plan as your financial goals evolve over time. As we have seen throughout the pandemic, having the flexibility to pivot is paramount to success.
