When it comes to renewing your mortgage there are numerous factors to consider. And with so much financial jargon and so many changing dynamics, your mortgage renewal can seem pretty overwhelming. Sometimes, having a few key pieces of information can be crucial, and arming yourself with just a little bit of industry knowledge can ensure that you’re in charge of your financial future. If you are planning on a mortgage renewal in Ontario, then the tips below should provide some of the extra help you need.
Perform the Proper Rate Research
Take the time to compare and contrast what you are paying to the current mortgage rates on the market. You may find that they are slowly going up, or perhaps they are actually lower. In order to determine how much leeway you have in terms of negotiating a better rate, you will need to compare your current rate to what other financial institutions are currently offering. That way, you’ll be able to leverage the entire marketplace to get the best rate for yourself.
Never Accept the Posted Rate
Banks, like virtually every other business on the planet, are focused on maximizing profits, sometimes at the expense of the client. As such, you should think of their posted rates as the rate they hope all their clients will pay in order to maximize their profits. Be confident and ask for a lower rate, and if they refuse then simply go with another lender that will. With a myriad of competitors on the market, you will likely have many different options to choose from.
Lower Doesn’t Necessarily Mean Better
Some financial companies will try to wow their prospective clients by providing the lowest rate. However, there may be a catch with their supposedly incredible rates, so always remember to read the fine print before you sign the agreement. For instance, a lower rate may seem very enticing, but it may come with very high mortgage penalties if you decide to break your mortgage before the term is up.
As life can be unpredictable, a sudden death in the family or a job loss can cause Canadians to break their mortgage earlier than initially anticipated. A lower rate may also mean you will have to sacrifice the ability to make additional payments.
Keep up the Same Payments
This may seem like a strange idea to some. After all, what is the point of going through all the trouble of getting a lower rate if you’re just going to end up paying the same monthly payments? In reality, while lower monthly payments may augment your cash flow, the amount will likely be fairly insignificant. However, if you opt to make the same monthly payments you before at the lower renewed mortgage rate, then you will be able to pay it off much quicker and reduce the overall amortization. As such, you will be able to maximize your return on investment or get the most for your hard earned dollar.
Save More for Your Principal
The ideal time to make a lump sum payment on your mortgage is during the mortgage renewal period, as there are no pre-payment limits to worry about. As a result, you can save quite a bit in terms of total interest costs, and make a significant dent in your amortization because each and every dollar will be spent on paying down the principal.
For more tips and help to save as much as possible on your mortgage in Ontario, call Northwood Mortgage™ at 1-888-495-4825 or contact us here.