Mortgage 101 – refinance while home values are up | July 2021 Part 4

In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on News 95.7, the guys talk about the benefits of refinancing while home values are up, refinancing during matrimonial breakdown, and home renovations while lumber prices are down.

Mortgage 101 with Clinton Wilkins & Todd Veinotte – July 2021 – Part 4

Don’t feel like watching the video? Check out the transcript below.

Transcript:

Leading in to matrimonial breakdown and homeownership

Todd Veinotte: [00:00:00:03] Anyway, the three hallmarks of a mid-life crisis are the sports car.

Clinton Wilkins: [00:00:03:08] Yeah, check.

Todd Veinotte: [00:00:04:21] Yeah, the cottage or the whatever, the pad.

Clinton Wilkins: [00:00:09:01] Yeah, maybe it’s a bachelor pad.

Todd Veinotte: [00:00:10:08] Maybe the bachelor pad.

Clinton Wilkins: [00:00:11:01] Maybe you’re going to get the bachelor pad after the affair.

Todd Veinotte: [00:00:13:03] So you’re going to get two out of those three. Definitely not the affair.

Clinton Wilkins: [00:00:15:11] Here’s the thing I hear about, and that’s what I was trying to get at: matrimonial breakdown.

Todd Veinotte: [00:00:20:20] Exactly, that was the lead-in!.

Clinton Wilkins: [00:00:22:14] I just couldn’t get it out because here’s the thing, I was just so caught off guard. Anyway, matrimonial breakdown happens all the time. People’s health issues happen all the time.

Todd Veinotte: [00:00:31:18] We’re having a little fun with this, but it’s very serious.

Clinton Wilkins: [00:00:34:21] It really is serious. You’ve been through matrimonial breakdown. I’ve certainly been through break breakups before. It’s not a good situation. Nobody wants to be in this situation. I know we’re kind of joking about it. And it’s good to kind of make light on the situation when you’re maybe not involved in it, but it really does happen. And one thing we really want to talk about is mortgage refinance.

Refinance while home values are up

We’re certainly getting a lot of inquiries for refinances right now. And honestly, probably more than normal in the summer season, normally summer is all about purchasing, purchasing, purchasing, or, you know, maybe you’ve had a pre-approval earlier this year and you’ve made an offer and now it’s going to close. But we’re doing a lot of refinances.

And the reason being is property values are up across Nova Scotia and the mortgage rates are low. So people are looking at getting equity out of their property. And maybe that’s for matrimonial breakdown, hopefully not, but it does happen, we know 50 per cent of marriages end in divorce, but people are doing refinances to consolidate debt. Maybe they bought that sports car during their midlife crisis and they can’t afford two car payments or three car payments.

Clinton Wilkins: [00:01:45:20] So people are pulling equity out of their home to consolidate some debt. And, you know, it’s credit cards. It’s lines of credit. Things happen in people’s lives. You know what I mean? There’s been job loss. We’ve all been there. There has been health issues. There’s been matrimonial breakdown. There’s been loss of business.

Do you refinance now, or wait?

And no matter what the situation is, sometimes that creates some financial hardship. And, you know, refinance can be a great solution for borrowers to maybe get out of a tight spot. You can refinance up to 80 per cent of the market value of your home.

Todd Veinotte: [00:02:18:26] That’s appraised?

Clinton Wilkins: [00:02:20:01] Yeah. So the appraised value, market value and you know what? The market values are up, you know, as the property, it’s a it’s a great time to think about it, because the market values are up and the rates are low. And, you know, if you’re refinancing now, you can hypothetically get more equity out of your home today than you could have a year ago or two years

Todd Veinotte: [00:02:39:16] Or maybe what you might be able to get in a year from now.

Clinton Wilkins: [00:02:42:15] Well, who knows? And that’s kind of the debate Todd. That’s kind of the debate. We don’t know what’s going to happen with home values. We don’t have a crystal ball. I wish I did. I’d probably be retired by the age of 40.

Preparing for retirement with smart decisions

And I always kind of joked around to say, you know what, I’m going to retire when I’m 40. But guess what? That’s not happening. I knew 10 years ago that wasn’t happening because I had the sports cars, I’ve had the good life, I’ve had the debt and, you know, if I would have made maybe better decisions 15 years ago, I probably could be retired.

Todd Veinotte: [00:03:17:14] Well, you wouldn’t want to be retired.

Clinton Wilkins: [00:03:18:27] I wouldn’t want to be. You know, honestly, we were kind of joking about it today. And my business manager, who takes care of all our people and all my finances and stuff like that.

Todd Veinotte: [00:03:30:02] Want to give your business manager a shout out?

Clinton Wilkins: [00:03:31:17] Amanda. She’s probably listening. She tunes in on the weekends.

Todd Veinotte: [00:03:35:08] And I met her and Dartmouth.

Clinton Wilkins: [00:03:36:24] Yeah. And she actually has a young kid, but she loves listening to the show, you know, and she listens during the week, on the weekends.

So, she said to me, she’s like, you know what, you’re going to be retired in 10 years. And I said, OK, to myself of my 10 years, I’ll be like almost 50. But what will I do at that point? I don’t think I just want to be on the radio. I don’t think I just want to do like TV and all the stuff. I want to be involved and who knows what the future will bring. But I think the moment is so important.

Refinances are a snapshot in time

And just to circle back to the refinances a refinance is really in the moment. And it may be required for getting some debt cleaned up, it could be required for matrimonial breakdown, maybe you need to refinance to pull some equity out of your home or maybe take your spouse or ex off title, but maybe you’re going to refinance to improve that property.

Maybe you’re going to renovate. Maybe you’re going to pull that equity out of the property for the refinance to buy a second home, maybe going to buy a cottage or maybe you’re going to buy a rental property. With the values increasing and the rates low, it is a good time for a lot of borrowers to really consider it. And we’re having those conversations with every borrower that’s really coming up for renewal.

We’re talking about refinance, but it’s not just at renewal that it’s happening. People are refinancing in the middle of their term because the rates are low and they’re basically capitalizing or the penalties getting paid out of those new mortgage proceeds.

Renovations, construction and lumber prices

Todd Veinotte: [00:05:11:27] And doing some renovations and some good news on the renovation thing is I’ve heard that lumber and prices are finally coming down to earth, back down.

Clinton Wilkins: [00:05:21:28] It’s great, great news specifically for the construction industry and really for our clients who are building new homes. I can tell you there’s been a lot of delays because of materials and there’s certainly been a lot of increases because of the cost of materials. So I’m happy to see some of these reports that the inventory is coming back in line.

And, you know, lumber is really commodity at this point. And, you know, I saw some funny memes on Facebook and Instagram and someone had some lumber out in front of their yard to build a deck. And somebody joked to be like, stop flashing your wealth in front of me type thing because of that lumber. And, you know, it really is true. And it’s tough.

It’s tough for those people who are self-employed, maybe working in the trades or working in the construction industry. And it’s certainly tough for existing home owners that are looking to do work. But I’m glad that things are coming back in line and I really do hope that the rates are still going to stay low. And I do think the values are going to kind of stay where they’re at. I do.

I think they’re going to continue increasing at this rate that they’ve been increasing the last year, I’m not sure, but I think that’s a TBD and I think we’ll be talking about that probably next month and in the months to come.

Thanks for tuning in and see you next month

Todd Veinotte: [00:06:32:05] How do people get a hold of you?

Clinton Wilkins: [00:06:33:29] Know, check us out online at TeamClinton.ca. Lots of great information on our website. We have hundreds of blog posts. We have rates on there.

Todd Veinotte: [00:06:42:21] Even Todd Veinotte posts on there.

Clinton Wilkins: [00:06:44:17] We’ve Todd Veinotte posts on there. And, you know, you can listen to our show on the website. There’s links on there. Our show is available anywhere where you get your favorite podcasts. It’s on Facebook, on YouTube, you can find us all over the place. And, you know, we’d love to answer your questions. Whether you’re an existing client of ours or not. We love providing the information. So feel free to check us out at TeamClinton.ca/Radio

Todd Veinotte: [00:07:11:00] Great chat, as always, Clinton. thank you so much. It’s always a pleasure, my good friend.

Clinton Wilkins: [00:07:14:23] Thanks, Todd.

Todd Veinotte: [00:07:15:08] You got it. That’s Clinton Wilkins, Mortgage 101: Your Guide to Homeownership. I’m Todd Veinotte, and we love being here on News 95.7. We’ll be back next month. Thanks for listening.

If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.