When mortgage renewal time rolls around, you will get a letter from your bank or other financial institution letting you know that it is time to renew. Unfortunately, many Canadians simply renew with their current institution at the offered rate without checking to see if doing so is really in their best interest. Before you renew your mortgage, here are ten things you will want to check.
1. What are current mortgage rates?
Knowing the current interest rate of the Bank of Canada plus the average rates that people are getting on mortgages at the time of your renewal will give you a quick snapshot into whether your current lender is offering you a good deal.
2. What is the lowest rate?
The posted rate is hardly ever the lowest rate. Many lenders are willing to negotiate better deals. Your mortgage broker should be able to give you some insight into how much lower a lender is likely to go than the posted rate.
3. What is the best rate?
Just because a mortgage rate is the lowest, doesn’t mean it is the best choice for you. In addition to looking at the rate itself, you need to look at the terms and conditions. Is the mortgage fixed or variable? Are their hidden terms that could make it difficult to sell or change lenders later on? Part of the job of your mortgage broker is not only to help you find a good rate but also to assess your situation and help you get the best terms for that situation.
4. Can you keep your payments the same?
Even if you get a rate reduction at mortgage renewal time, it is a good idea to keep your payments the same. This will help you pay off your home faster.
5. Can you pay a little extra?
If you can afford to pay more, why not consider this in order to pay off your home more quickly?
6. Do you need extra money for projects or investments?
If you require some additional cash for renovations, a new car or to invest in a business, mortgage renewal time is a good opportunity to get the money you need. Rather than getting a separate higher interest loan, you should consider using the some of the equity in your home. This works by getting a larger mortgage than you currently owe and getting the extra amount in cash.
7. Is it time to switch lenders?
If another lender can offer you a better deal, mortgage renewal time is one of the best times to switch.
8. When is your renewal deadline?
There is a lot to consider when renewing your mortgage. Give yourself the time you need and avoid waiting until the last minute.
9. Are you working with a broker?
Working with a mortgage broker will give you access to a greater number of lenders – meaning you are more likely to find the best deal for you when you renew.
10. Are you working with Akal Mortgages?
It is important to work with a mortgage broker, but it is also important to work with a mortgage broker that has specialized knowledge of your situation. At Akal Mortgages we specialize in all kinds of mortgages including bad credit mortgages, mortgages for the self-employed and mortgages for newcomers to Canada.
Contact us today for a consultation.
When we say YES! We stand behind our promise.®™