February 6, 2013
The biggest monthly expense for most Canadians is their mortgage payment.
Yet almost 27% of households automatically renew their mortgages when the term is up instead of trying to find a better deal. Here are some questions to ask yourself at least 5 months prior to your renewal.
1. Are you satisfied with the services offered by your current lender?
2. Does your household budget allow you to increase your mortgage payments so you can pay off your mortgage sooner
3. Do you want to change your payment frequency?
4. Can you make prepayments?
5. Do you want to consolidate other debts that have higher interest rates?
6. Do you need money for a major renovation?
Knowing at least 5 months in advance when your mortgage is up for renewal will help you be organized and get a head start.
Start your shopping around for a better deal as most lenders will hold a rate for 120 days. If your current lender’s rates rise you will have that guaranteed rate to fall back on. If they drop you can renegotiate a new rate.
Before negotiating make sure to do some homework. You can visit lender websites to check out what the current rates are.
If you do not like negotiating or do not have the time to do homework on current rates a Mortgage broker has access to a large variety of lenders. Therefore they can do your shopping around and negotiate for you most efficiently.
Many people will automatically renew their mortgage with their current lender, despite knowing they can save money if they were to switch to a different lender. Most do not know that there is no penalty to switch lenders at the time of renewal!
Remember, a mortgage is most likely the biggest purchase of your lifetime. So it is worthwhile to hire a professional mortgage broker who has your best interests in mind.
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