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Mortgage Renewals: The 2 Biggest Mistakes & How-to Avoid Making Them 2018-05-04 05:22:38 Akal Mortgages Mortgage Renewals: The 2 Biggest Mistakes & How-to Avoid Making Them

couple signingIt’s extremely unfortunate, but most mortgage holders are not aware of the biggest mistakes that are made during mortgage renewals. Don’t let a mortgage renewal be your worst nightmare.

Two of the Biggest Mistakes

Beware, if your mortgage lender:

  • Contacts you long before your mortgage maturity date or renewal date offering to renew your mortgage right then and there
  • Offers you something other than their bottom-line rate, that has a limited-time offer attached

These are the top 2 mistakes that most mortgage holders make when renewing and these mistakes have costed homeowners thousands during the life of their mortgages. It’s not in best interest to accept or act on either of these offers. The crux of the matter is, if you think you are going to get a bottom-line rate, think again! You will have to work to find it. An honest broker or lender will never give you an offer acceptance deadline if the offer is truthful and valid.

You are not obligated to lock into the first rate your lender provides you with. To negotiate your rate properly, your mortgage broker helps you to secure your rate for up to 4 months. This will allow time to monitor if rates decrease, to get you the best rate possible, and save in the long run. So you should consider all the options available to you.

How-to Avoid Making These Mortgage Renewal Mistakes

  1. Plan ahead – If you start planning your mortgage renewal at least 4 months before your maturity date, you will get a good idea of the lenders and products that are available to you. This year Annual Percentage Rates (APRs) are expected to increase by 1.25%, so in this instance being prepared and knowledgeable is imperative to making an informed decision.
  2. Hire the right broker – Should you make a mistake and hire a mortgage broker or lender that does not have your best interest at heart, this can harm your pocket. So, take your time looking around and be sure to ask the right questions and have some understanding on what the response should be. When in doubt, just ask AKAL Mortgages agent or Google!
  3. Change the frequency of your payments – Reduce the lifetime of your mortgage by switching to bi-weekly payments. You can ask your lender if this option is available to you.
  4. Define fixed and variable rates – Fixed APRs will protect your rates from increasing or decreasing, whereas variable APRs change depending on the economy.
  5. Reduce your mortgage loan period – Ask your lender to assess your current mortgage period if you have variable rate and adjust to reduce your loan period (if possible).
  6. Insure your loan to protect your home – Investing in mortgage or life insurance is probably one of the wisest investments you can make. It provides a safety net to both you and your family in the event of emergency and/or death.

Mistakes are always avoidable, and having guidance such as this play a crucial role in helping you not to make them. Having guidance from a qualified mortgage agent can also prove to be extremely helpful, since mortgages can be a bit tricky. Especially if you don’ t have a good understanding of the industry, trends, rates, and economy. Get in touch with AKAL Mortgages, your experienced mortgage broker by calling 416.621.1300.

When we say YES! We stand behind our promise.

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