Lethbridge Alberta Mortgage Renewals
What happens when my mortgage term comes up for renewal?
Usuallly in Lethbridge Alberta, 30 days before your existing mortgage term comes up for renewal you will receive a letter from your existing mortgage company offering to renew your existing financing. The lender will offer you a choice of several different new terms ranging from short term open to longer term closed and locked in rates. Typically, the rates offered by the lender upon renewal are not the lenders best rates and sometimes the lender even takes this opportunity to ask you to submit a 'renewal' fee. For these and a few other reasons, this is the optimum time for you to educate yourself and to have a mortgage broker see if there are other lenders avaiable who are willing to compete for your business and in turn save you money.
What if my mortgage company doesn't offer to renew me ?
As long as your existing mortgage payments are current and you have not had a history of late or non-payment of your mortgage, the probability is great that your mortgage renewal documents will be arriving by mail. Some lenders seem to delay the sending of these documents as long as possible as if to prevent you from having time to explore the alternative options that may be avaiable to you from other lenders.
What are the main advantages of calling you before renewing?
Upon renewal of your mortgage term there are several things that you are able to do without incurring fees or penalties that you would while you are locked into a fixed term with your bank.
1. You can increase or decrease the amount that you owe on your mortgage. Either use some of your savings to pay down your existing balance, or borrow out a little more of your equity for alternate uses at an interest rate that is among the lowest available to you.
2. You can increase or decrease the amortization of your mortgage. This means that you can change the length of time that your repayment occurs over. Recent changes in Canada now make it possible to amortize a mortage over 35 or 40 years for those who wish to minimize their monthly payments.
3.You can select open or closed mortgages as well as interest rates which result in a payment that is acceptable to you. Depending upon how long one plans to own the property there are different options available.
Before you sign or renew with your existing lender you should compare what other lenders would do to earn your business. Please contact us to obtain more information or to have us make that comparison for you.
Why doesn't my existing mortgage company offer me better rates upon renewal?
Quite simply, because they don't have to. The majority of consumers have in the past just signed their renewal document and paid whatever fees their lender asked for without question. Currently about 75% of people renew without being educated to the fact that they could have saved money by shopping around or negotiating a better interest rate. The bank already has you as a client, they don't need to compete to win your business, and so they do not. Often I can find you rates that may be up to a full 1% lower then the banks posted rates which results in a monthly payment that can be $50, $100, or a couple dollars a month less on the average mortgage. Wouldn't you want to shop around if it could lower your monthly mortgage payment by over $100/month?
Please contact us to get a full list of the many options that are available to you before you renew.
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