Why the need for a strategy?
There's a simple reason. When renewing your mortgage, you're most likely in a different financial position than when you first obtained the loan. As our financial and life circumstances change, so does the mortgage that is best for our needs and goals. Getting married, additions to the family, receiving an inheritance – these are all major life events that can have an impact on which mortgage makes sense. In fact, most of us have questions as our mortgage nears renewal: Should I go with a variable or fixed mortgage? What about taking some of my home's equity and using it for renovations or investments? How can I be sure I'm getting the best rate?
The "strategy" to avoid
At mortgage renewal time, don't be too quick in just signing the renewal form and returning it to your current lender. If you do so, you could be paying a higher rate, and end up with a mortgage product that might not be best suited to your interests and in some cases untold thousands in lost opportunity. That's really no "strategy" at all!
You better shop around…
Canadian mortgage holders are becoming more savvy. More and more, homeowners are shopping around to get a better rate when their mortgage comes up for renewal.However, working on your own, you could apply to perhaps two or three financial institutions and select from their in-house mortgage offerings. A better approach is to talk to a mortgage broker – he or she can "shop" your application to an extensive line-up of lenders who offer a wide range of mortgage options.Most importantly, a mortgage broker can offer expert advice on a customized mortgage strategy to ensure you are taking full advantage of the many mortgage options on the market in Canada. He or she will also negotiate with lenders on your behalf to make certain that you get an extremely competitive interest rate.
Thinking of switching?
For those who are thinking of switching their current mortgage to another lender to get a better interest rate, most lenders now offer "no cost or low cost switches." This can be a smart way to reduce your interest costs. Think of your mortgage renewal as an opportunity – to get the most from your financing. With a little advice, and a strategy in place, you'll be confident that your mortgage is meeting your needs – now and in the future.
Let me help you through the process!