The best mortgage renewal tips start with: don’t sign your mortgage renewal! If we could offer one tip and one tip alone this would be it. Rarely, if ever will a bank offer you the lowest rate at renewal time. In fact, it is quite the opposite.
Most banks will send you the highest rate they feel they can get away with. And, sadly enough, most homeowners will sign it without question. With this in mind, you are almost assuredly going to cost yourself thousands of dollars.
We recommend looking at your renewal options well before your mortgage maturity date. In general it is wise to start looking at least 120 days prior to your mortgage renewal date. Indeed, the early bird gets the worm and the vigilant shopper gets the best mortgage deals. Moreover, you need time to find out not only what your bank intends to offer you but what other deals are on the market
Not all mortgages are created equal. Just because you are being offered a low rate by a lender you may find the terms aren’t that agreeable at all. Notably, many lenders will offer a low rate but tack on large penalties to get out or restrict prepayment options. You have to look at every aspect of a mortgage, not just how appealing the rate is. A good mortgage broker can help you navigate some of these questionable lender practices.
If you genuinely want to get what you deserve, sadly you have to ask for it. Approach your bank to see what the best rate they will give you is. Especially because they certainly won’t give it to you their best rate in their initial renewal offering. In fact, there are instances where their initial renewal rate may be 2-3% higher than what they would offer a new client.
Amortization, payment schedule and term can all play a factor in how large your payments are. And, they can also determine how fast you pay off your mortgage. You have to weigh every aspect of your mortgage to make sure that you do what is right for you. Should you be looking at a fixed rate mortgage? Perhaps a variable rate mortgage may suit your needs better? Again, an experienced mortgage broker can walk you through a variety of scenarios. This will help ensure you are doing right by you.
We aren’t suggest you move houses. But, moving lenders can open up a whole new world for a borrower. What seems like a good deal today may not be the case tomorrow. Likewise, what your bank is offering you at renewal time likely isn’t the best deal in the market. In fact, the mortgage lending world is very competitive and if you spend time looking at options you will find that there is always a lender that is willing to go above and beyond to earn a customer’s business. Remember, some of these mortgage lenders can only be accessed by a mortgage broker so at the very least you should at least consult one before you sign your renewal.
Your home is likely the biggest purchase you will ever make in your lifetime. And, just saving a marginal amount on your interest rate over the term of your mortgage can save you tens of thousands of dollars. Don’t put your hard earned dollars at risk. Make sure that you know what you are getting in a mortgage and you are getting what you deserve.
No matter how much research you do it is almost impossible to know what every lender is offering or if what they are offering is something you should want or conversely fear. Not all mortgages are created equal and having a mortgage broker on your side to sort out the good from the bad can save you a lot of anguish down the road. They can also provide an unbiased opinion about the ups and downs of each mortgage and each mortgage lender because they don’t work for the banks directly, they work for you.