Avoid higher rates – avoid unsuitable products and terms – don’t be part of the crowd!
Mortgage coming up for renewal? Don’t be too hasty in just signing the form and sending it back to the lender. Many mortgage holders do just that, and the usual result is a higher rate and a mortgage product that might not be best suited to their interests.
Let us do the legwork for you – we will find you a very competitive rate and product to suit your interests. Click here to sign up for our Mortgage Renewal Registry.
Renewing / Switching
If you’re wanting to renew/switch your mortgage to another lender who will most often give you a better rate, most lenders now offer “no cost or low cost switches.” Canadian Mortgage Experts powered by Dominion Lending Centers can take care of all the details for you and help you negotiate with your existing lender or find a new lender who will give you very competitive rates. Get us working for you today. In addition, here’s how switching works along with important related information.
What happens legally when you switch?
Most people are unaware of the legal effect of switching lenders. When you renew you are essentially starting the process again – discharging the existing mortgage, taking out a new one, and beginning the whole payment process, albeit at a lower principal amount. As such, you should treat this as just as important a process as the first time you arranged the mortgage. Remember your situation will most likely have changed since then, and you require a different product with different terms attached to suit your situation.
In most ABs a switch of the current or lower balance requires only a simple assignment of interest in the mortgage to be executed by all parties and registered on title. This assignment also attaches the specific terms that will have legal effect, and replaces those of the transferring institution. So even though the old mortgage is still registered on title, all those old terms and conditions registered by your previous lender will be completely replaced by those of your new lender under the assignment of interest.
Moreover, the form that you are holding in your hand from the lender who did your previous mortgage financing has a rate that probably is not as competitive as it could be. Don’t let the hassle from the first time you negotiated lead you to just signing the form and sending it back to the lender – it will most probably cost you in the form of higher rates.
The lenders count on renewers just signing the form and mailing it in – they are not forcing you – but they are preying on human nature to embrace convenience. However, let us do the work for you – the same convenience, at a much lower cost to you and a product and terms that will suit your current situation. The fact is that it is likely another lender will give you what you want at a rate you want – there are no legal implications to you switching.
Financing strategy for renewing
As an experienced homeowner and borrower, you are probably already very familiar with the mortgage products and services of your current lender. It could be to your advantage to use another lender. Contact us today to help you make the switch. As well, here’s some important information to keep in mind:
What type of mortgage should you choose?
Today, more than ever, there are numerous mortgage options available. Don’t be confused
We can help you find the best product for your needs and negotiate you the best rate. We do the research for you, enabling you to avoid the frustration and confusion of having to do it yourself, and explain the available options.
Common Mortgage Categories
Fixed-rate: 6 month, 1, 2 and 3 year (open, closed and closed-convertible) 4, 5, 7 and 10 year closed
Variable-rate: 3, 4 and 5 year (open, closed, closed-convertible and capped)
Split-term: Combination of all possible terms (6 month through 10 years)
Self-directed RRSP: A specialty mortgage rate – term optional – within CMHC guidelines. Invest your own RRSP funds into all or part of your home mortgage.
What terms and payment options should you choose?
It all depends on what you want. We will assess your personal situation and needs to find the best mortgage for you at the best rate.
Short-term and variable
If rates are low and stable, and/or you are prepared to take a risk, you can generally pay a lower rate with a short-term mortgage. You simply roll over your term every 6 months, or float your rate against prime, with the option of locking in to a longer term at a later date. This is not for everyone, however, as sudden upward rate movements can have a significant impact on your payments. You may want to discuss this with us.
Any term 3 years or longer is considered “long term” in today’s economy. Because long-term rates are usually higher than short-term rates, you may not want to choose this option. On the other hand, by locking in you will avoid exposure to rate increases. You’ll have the comfort of knowing exactly what your payments will be and you’ll be able to manage your budget accordingly.
A mortgage which allows you to minimize – or hedge – your interest rate risk by splitting your mortgage into five parts. For example: A $150,000 mortgage could be split into five $30,000 segments with terms of 6 months, 1, 2, 3 and 5 years negotiated at today’s competitive rates. The average rate would rise or fall much more slowly than changes in the market, however, as only the shorter terms are affected by even the most volatile rate movements over the first few years. Confused? Talk with us.
Many lenders allow you to make a lump sum payment – usually 10% to 20% of the original principal balance. In addition, many mortgage products now include a “double-up and skip-a-payment” feature. This lets you “bank” extra mortgage payments for a rainy day, at which time you can “skip” them if you need to. Ask us to advise you on your options today!
Most mortgages now come with the option to pay your mortgage at a frequency that matches your cash flow – weekly, bi-weekly or semi-monthly. The added benefit of the “accelerated” weekly and bi-weekly payments is that by dividing a regular monthly payment into two or four respectively, and deducting it at the new interval, an extra payment a year is made directly against principal.
Take advantage of our renewal registry! Register now and we will guarantee you the best rate 120 days prior to your renewal. You can register up to four years in advance – just fill out the form below.