Jan
18

Renewal Time!

Ok, so it’s been a few years and you’ve been busy hammering away at your mortgage principal and now it’s time to renew your mortgage. This post will share some myths, insights, and ideas I have when discussing renewals with clients.

First of all, renewal time is your best chance at getting the best deal without any cost. Whether you went fixed or variable, short- or long-term amortization, the lender you’re with now knows full well you may not shop your deal around therefore they will offer you an average and mediocre rate. If you fail to sign up and do anything about it, they’ll offer you an even worse rate: the dreaded convertible option. This means they will fix your mortgage, apply high penalties to leave, but give you the option of picking another term with them at anytime, without cost. Let’s face it: lenders salivate at offering high-rate renewals because they know the great majority of people are too lazy to change their lender. Don’t be that person! Shopping a mortgage renewal is extremely easy and simple and best of all, free*.

Second, if you want to refinance, doing so at renewal will save you on any mortgage penalties and oftentimes there are no legal fees involved either - depending on the new lender you pick. Some lenders offer “free refinance” options where they pick up the legal tab. Heck, I even do it for some clients (especially returning ones) as a way of showing my appreciation for their loyalty. So if the post-holiday Visa bills have you down, consider refinancing during your mortgage renewal to wipe away high-interest debt and start fresh.

Third, here’s a common myth I hear, if you renew with your existing lender you do not need to “requalify” or, prove income. A renewal…

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