Best Way to Renew Your Mortgage

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Best Way to Renew Your Mortgage

In the mortgage business, most people are unaware of the best way to renew your mortgage.  A typical scenario for most clients renewing their mortgage occurs when they are contacted by their lender several months prior to renewal and the lender offers to renew the mortgage for them on the spot. The lender will usually offer some sort of rate that is not their bottom line rate and will let the client know the rate is only valid for a day or two and will then not be available after this time.  This may or may not be in your best interest. Being aware of the following top mistakes can save you thousands over the time that you have a mortgage!

First of all, they will almost never offer you their bottom rate and will almost always make you go shopping for it. Second of all, they are usually not telling the truth about the rate being available for a day or two. Unless the rates change, the rate will continue to be available onward from that date.

Even knowing this information, most people still do not know the #1 mistake they are making when renewing their mortgage! The #1 mistake you can make on your renewal is locking in at the rate your lender gives you on a certain date and not giving yourself the ability to shop around for the best deal for at least a 4 month period.

The most successful way to negotiate your renewal is not to early renew immediately when given the chance. The best way to negotiate your renewal, whether with your current lender or another lender, is to get a rate secured for 4 months. First of all, this gives you the option to get the best rate secured today, have it held for you for the next 4 months and doesn’t force you to lock in immediately. Most important though is that during this 4 month period you are able to monitor rates and get the lowest rate possible over the 4 months. So rather than locking in to what you are offered on one particular day, you get the lowest rate over 4 months. Why wouldn’t you want to have a chance to see what rates are like over a 4 month period rather than 1 or 2 days? It is a no lose situation for you. You will get the best possible rate and can save thousands of dollars.

We have the ability to obtain a 4 month rate guarantee, if necessary, at no cost to you. Just like when you negotiated your mortgage when you first bought or refinanced your place, it is just as important to look at your options closely for each renewal. We have had clients tell us that they’re not concerned about saving a few thousand dollars and it’s “just easier to renew right away”. Many of you will have at least 5 to 6 mortgage renewals, if not more, throughout your life and settling for higher rates each time can easily cost you many years of extra payments and interest over your lifetime. Being aware of these top mistakes can save you thousands over the time that you have a mortgage!

We are here to help you make the best informed decision for your renewal and would like to help you secure the best rate possible with your current lender or another lender so that you can pay off your mortgage as quickly as possible. Give us a quick call and you can make a better informed decision about your mortgage renewal!

For more information on our mortgage products please visit our website at www.ymscanada.ca.

Important Reminder Regarding Your Mortgage Renewal

If your mortgage is up for renewal and you are being contacted by your lender to early renew before the maturity date please call or email us before signing the renewal. We are able to give you a quick recap of rates in the market to make sure you aren’t signing for a rate/term that isn’t beneficial for you. Often times your lender will tell you that you only have a very limited time to sign the renewal to pressure you into taking the rate they want. Get in touch with us for a quick 2nd opinion!

If you require any further information regarding this article or any other mortgage matters please contact our office at 604‐556‐3893. Also, as a reminder to anyone looking for a mortgage, we offer 4 month pre-approvals at no cost to you. This means that you can get a rate hold for up to 4 months to protect yourself in case rates rise.

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About the Author:

Alex Kotai

Alex Kotai has worked in the mortgage lending business for over 10 years. His career started at HSBC Bank Canada where he spent most of his time in senior management roles which involved training and managing the sales staff at his branch. After leaving HSBC, Alex decided to open his own mortgage brokerage firm, Your Mortgage Source. Through his company, Alex has access to many lenders across the country with a very expansive list of products.