Mortgage Renewal – Buyer Beware

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Mortgage Renewal – Buyer Beware

When it comes to your mortgage renewal you can be sure your lender will be contacting you to try and keep your mortgage with them. In most cases the lender you are with WILL NOT offer the most competitive rate for your renewal. This is because Banks will often be more aggressive in acquiring new customers than they are in retaining existing customers.

It might seem like this is easy enough to get around; however, we have found that Banks will use fear tactics with their customers in trying to get customers to renew on the spot without shopping their mortgage around. One typical tactic a Bank will use is to call their customers to early renew, perhaps as much as 6 months prior to their renewal date. They will offer to renew the mortgage for the customer right now with no penalty; however, they can only hold the rate for a day or two and they force the customer to make a decision on the spot without being informed and gathering rates elsewhere. Not only do we find this tactic just simply wrong, it is unethical. The fact is your bank can guarantee you a mortgage rate for 3 or 4 months, never mind the 1 or 2 day window they are offering you for this renewal.

Banks will often tell you that it will cost you fees to move your mortgage to another lender upon renewal. Well this is not true in most cases. When transferring your mortgage to another lender upon renewal there is no penalty to move the mortgage as your mortgage is up for renewal. As soon as your mortgage comes up for renewal it is open and therefore has no penalty to pay it out. Also, most lenders will cover the cost of transfers so there is usually no cost to get yourself a better rate elsewhere.

We have heard many disheartening stories from customers who were contacted by their lender on a renewal and renewed with them because of the fear tactics used by the bank to retain their business. You need to know you have options. We are here to give you unbiased advice at all times regarding your renewal. You are free to contact us for a 2nd opinion before signing any renewal with your bank. We will give you no cost advice and let you know if it is best to renew with your existing lender or look at options elsewhere. It only takes a few minutes to make that phone call to make sure you have made the best educated decision for yourself and not your Bank.

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.

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.