Are you thinking about renewing your mortgage? This is where your killer instincts and financial prowess will help you bring your payments down to zero faster.
There is one all-important question when it comes to any mortgage: How soon do you not want to have any more payments? The answer may seem simple, but it is the action that is the crux of the thing.
The Early Bird Gets the Cash
When your mortgage term is coming up to its renewal point, you should already be thinking about what the next steps are. Financial institutions, such as banks, will send a renewal statement approximately 21 days before the mortgage term is up, but you should be shopping around long before this happens - at least four months before. If you are scrambling around in the last days of your term, you might have to choose out of necessity rather than out of desire.
The Early Shopper's Discount
You are allowed to change lenders once your mortgage is up for renewal, but if you blindly accept the new rate your current lender offers, you might be losing out. Check out the different lenders and rates they offer, because they can differ significantly. Bank of Montreal's 5-year fixed rate mortgage currently sits at 5.140% while Butler Mortgage offers 2.74%. That is a difference of 2.40% - not just peanuts.
There are those who do not even think about changing their lenders, when they could be doing much better. There is no penalty for switching; it is entirely common - even recommended sometimes.
The Broker
Learning how to negotiate can be a valuable asset. Having negotiating skills means asking for a lower rate - and getting it. Banks rarely advertise the lowest possible rate, and unless you ask for it, you will not get it. There are also other negotiations like the payment schedule, the rate type and the amortization period. If this all seems incredibly daunting, you can opt for a mortgage broker.
A broker will do all of the above for you, and usually for free. No, they are not doing it out of the goodness of their own hearts; the lender usually pays a commission to the broker. A broker can usually find you a better rate than you could if you visit the lender yourself.
All you have to remember is the all-important question: How soon do you not want to have any more payments? If you come up with a solution that costs more money and more time, you need to come up with a better solution. These tips should be able to give you a running start when your mortgage term comes close to its renewal period.
There is one all-important question when it comes to any mortgage: How soon do you not want to have any more payments? The answer may seem simple, but it is the action that is the crux of the thing.
The Early Bird Gets the Cash
When your mortgage term is coming up to its renewal point, you should already be thinking about what the next steps are. Financial institutions, such as banks, will send a renewal statement approximately 21 days before the mortgage term is up, but you should be shopping around long before this happens - at least four months before. If you are scrambling around in the last days of your term, you might have to choose out of necessity rather than out of desire.
The Early Shopper's Discount
You are allowed to change lenders once your mortgage is up for renewal, but if you blindly accept the new rate your current lender offers, you might be losing out. Check out the different lenders and rates they offer, because they can differ significantly. Bank of Montreal's 5-year fixed rate mortgage currently sits at 5.140% while Butler Mortgage offers 2.74%. That is a difference of 2.40% - not just peanuts.
There are those who do not even think about changing their lenders, when they could be doing much better. There is no penalty for switching; it is entirely common - even recommended sometimes.
The Broker
Learning how to negotiate can be a valuable asset. Having negotiating skills means asking for a lower rate - and getting it. Banks rarely advertise the lowest possible rate, and unless you ask for it, you will not get it. There are also other negotiations like the payment schedule, the rate type and the amortization period. If this all seems incredibly daunting, you can opt for a mortgage broker.
A broker will do all of the above for you, and usually for free. No, they are not doing it out of the goodness of their own hearts; the lender usually pays a commission to the broker. A broker can usually find you a better rate than you could if you visit the lender yourself.
All you have to remember is the all-important question: How soon do you not want to have any more payments? If you come up with a solution that costs more money and more time, you need to come up with a better solution. These tips should be able to give you a running start when your mortgage term comes close to its renewal period.
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