Financial decisions surrounding home ownership are some of the most important decisions in the average Canadian’s life. Mortgages are one of the biggest financial burdens faced by homeowners and mortgage renewals are thus an important option to consider. Often homeowners can be tied to a contract with an unreasonable payment period or a fixed contract that does not fluctuate with decreasing mortgage rates.
The reality is that most Canadians do not take the time to explore their options when the time comes to consider mortgage renewals. The easiest decision is to simply renew ones’ contract with the current lender; this seems like a far safer and time saving mechanism. However, taking just a bit of extra time to see what else is out there or judging whether or not the existing lender has given you a reasonable contract can save a considerable amount of money in the long term. Mortgage renewals offer the opportunity to get out of a contract that could be causing unneeded debt.Any individual knows that the financial climate can fluctuate rapidly, and thus mortgage renewals open up the possibility to take advantage of a particularly low mortgage rate and negotiate a fixed contract at this rate. Other homeowners might be attempting to get themselves out of a fixed rate mortgage to opt for a more flexible option. In order to fully research the benefits available, individuals should start looking into renewal options at least three to four months before the mortgage renewals deadline. This allows one to fully ascertain the larger economic climate and the various other mortgage options available. Not leaving oneself sufficient time to research other options will most likely result in opting for the ‘easiest ’decision; to stay with the same lender.
When mortgage renewal time approaches, the existing lender will very likely not warn you far in advance, nor will they make you aware of other options. An individual should recognize this, and begin shopping around for the best rate, being sure to ask as many questions as possible to various lenders. It is also worth it to question your current lender, making it clear you have done the homework on other lenders. This increases the chances that the current lender will offer a better agreement in order to keep the business.
The simplest step one can take when the time to renew a mortgage comes is simply to do the homework. Being educated on the differing mortgage agreements that are possible is one of the most financially sound decisions you can make.
