Your Mortgage Renewal: The Top 6 Mortgage TipsAdmin
If you currently own a home in Canada, then we’re sure you’d agree that you single largest monthly expense is your mortgage payment. Since ¼ of Canadian households opt-in for automatic mortgage renewal, they often overlook trying to find a better deal at the end of their term.
It’s unfortunate that a large majority of these people also miss out on lowering their monthly payments upon their mortgage renewals, so we don’t want you to become apart of this 25 percent statistic. Here are the top six tips from the mortgage brokers at Mortgage Alliance to help you make the best decision on your mortgage renewal.
Get a Head Start
It’s highly recommended that you get a head start on your shopping, at least a six-month head start. You don’t want to find yourself scrambling come renewal or missing out on a great opportunity for potential savings.
Most lenders can only guarantee a rate discount for a certain period of time, so the sooner you start shopping the better your chances will be to get a better rate. This is especially important for individuals who have a variable rate. If your current rate rises, the lower rate guarantee will protect you. However, if they drop then the discounted rate guarantee can help you to negotiate with your current lender.
Do Your Research
If you did your mortgage through a bank, then you’ll also want to find out what other renewal options are available to you. You’ll want to do this prior to negotiating a new rate with your bank, since bank rates can differ greatly. For instance, a five-year closed-term mortgage from Scotiabank, has a fixed rate of 5.29 percent, whereas ING Direct offers the same mortgage at 3.59 percent.
Lower Rate Price Match
If you’re happy with the mortgage advice, features and policies you get from your current lender, you can request a lower rate price match from your lender, based on what other competing lenders have to offer.
Keep in mind that when you’re dealing with banks you have to ask for a lower rate, it will never just be provided to you. Most often times, the expect you to transfer over other accounts and/or investments in order to lower your rate.
Don’t Forget to Negotiate!
The interest rate is not the only thing that matters when it comes to renewing a mortgage. You also need to consider the type of rate, fixed or variable, as well as the amortization period and payment schedule flexibility. All 4 factors are critical to lowering your overall costs.
Switching to Another Lender
If you think you can do better than your current lender, you’re absolutely right! Don’t renew before you think about other lenders and what they have to offer. You may come to a realization that you’re better off switching to another lender and the best part about it is that there is no better time to switch than renewal time, as there is no penalty to incur.
Get Help with Negotiation & Rate Research
If you’re not a great negotiator, simply don’t have enough time or know where, to begin with, rate research, then hire a mortgage broker to help. They can do all of the legwork and broker your deal, and it won’t cost you anything since most brokers work on commission. Their commission is paid by your lender for you.
It’s common knowledge that homeowners who don’t use brokers often pay more than those who do . You can save thousands on interest alone, not to mention getting better interest rates with less restrictions on your mortgage.