Is your mortgage coming up for renewal soon? When it comes time to renew, make sure you don't step blindly into another long term contract. Studies have shown that the majority of Canadians simply sign off on the mortgage renewal documents that arrive in the mail and end up staying with their current lender, but this does not always get them the best mortgage rate or the best mortgage product for their needs. Historically the bank posted rate is what you will be offered in a standard renewal. As a CENTUM Mortgage Professional, I can negotiate a better rate for you.
Keep in mind that interest rates are at a historical low, yet rate isn't everything. Having some flexibility in your mortgage at a slightly higher rate could be advantageous in the long run. Studies have shown that many people aren't aware of their mortgage options. Make sure you spend the time to research the right mortgage product, rates, and terms. Here are few common mortgage options for consideration:
This allows you to pay extra onto your mortgage (on top of your regular payments) without paying a penalty. Prepayment options range from the ability to pay 0 - 30% of the original amount borrowed to allow you to become mortgage free faster. Typical prepayments seemed to be in the 20% per year with some banks offering no restrictions on the dates or amount of these payments and some allowing anniversary payments only and one lump sum.
This option allows you to move your mortgage to a new home after you've sold your current one. Depending on the lender and mortgage product, there may be some time restrictions. For example, some lenders allow 90 days to port your mortgage to a new home, however you will have to pay the penalty up front and then get reimbursed. If you don't port within 90 days, the penalty will not be reimbursed as you have broken your mortgage term. Penalties are most often calculated at three month's interest or the Interest Rate Differential, whichever is usually higher.
If you think you want to plan renovations, purchase a vacation home or help finance your children’s education then you may want to give some thought to this option. This option allows you to increase the amount of your mortgage. There will be fees for this, such as appraisal ($200 - $400) and legal ($700 -$1000) and you will need to provide income documents and all of the same documents required for a new mortgage application.
If your mortgage term is up for renewal and you have no intention of moving from your existing property then this may be an option for you. A mortgage transfer allows you to move your existing mortgage to a new lender. There are minimal costs involved to the consumer as lenders primarily will absorb the cost to process a mortgage transfer. You will still need to provide all of the documents required for a mortgage application and there may be a appraisal cost but there should be little or no legal costs involved of which range from $700-$1000 normally.
Mortgage flexibility isn't for everyone. You'll have to consider what is happening in your life and whether or not any of these options are right for you. This is where I can help research different mortgage products offered by various lenders to ensure that you are getting the best rate and product possible. Having a qualified CENTUM Mortgage Professional working for you doesn’t cost you anything, but the advantages can save you thousands of dollars over the life of your mortgage.
If you would like more information about how I, as a CENTUM Mortgage Professional, can assist you in ensuring that your best interests are looked after, please do not hesitate to get in touch with me.