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.