Mortgage Renewal – Buyer Beware!

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Mortgage Renewal – Buyer Beware!

We’re seeing more and more situations where customers are being taken advantage of by mortgage lenders when it comes time to their mortgage renewal. It’s time for this to stop and for lenders to start treating their customers with the respect they deserve!

In the past, lenders would send out renewal information to their clients before the scheduled maturity date just to get the dialogue started.  Typically this information included the scheduled maturity date, the projected balance owing at maturity and the mortgage rates currently being offered.

The professional, conscientious lenders would send out notices that disclosed not their posted or counter rates, but the discounted rates their good clients should be offered.  After all, this is the way a good customer should be treated – correct?  Other lenders chose not to, hoping to snare a few renewals with customers who unsuspectingly believed their mortgage lender was treating them fairly.

Those customers who weren’t so naive chose to look around, and in many cases contacted a mortgage broker to see what rates were available in the marketplace.  In these cases the customers realized they were being taken advantage of and, with the help of their broker, transferred their mortgage to a new lender at a much better rate than their current lender offered.

Times have changed. Now we’re seeing lenders rarely offer best rates for their renewing mortgage clients. These lenders will often indicate the rate will be determined when the client goes in to sign the renewal documents.  Then when clients seek better rates elsewhere these lenders will magnanimously offer to match that rate, which begs the question “Why wasn’t the best rate offered in the first place?”.

We know it’s easier, and cheaper, to keep existing clients rather than to search out new ones, so why do lenders insult both the trust and intelligence of their client base.  The moral here is to do your due diligence and, equally as important, don’t go back to your lender if they don’t offer you the best rate the first time round. There are many products a lender uses to make money off its clients, and by going back to them you risk being forced to pay more in some other area.

The only way to stop this abuse of the mortgage consumer is to give your current lender “ONE” chance to bid on your current renewal.  Let them know you will get several quotes, and if theirs is not the lowest you will be leaving them. Only by negotiating this way will you ensure you get the best offer, and the respect you deserve for your business.

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.