Signing the renewal letter from the bank can cost you a great deal of money as most lenders hope you sign it send it back and not notice the rates given on the letter are posted rates and not discounted. Great for the bank but not for you.
Did you know, there are absolutely no costs to transfer your mortgage from one Banking Institution to another. No appraisal fees, no legal work and no penalties. Yet most persons will renew their mortgage with the same lender because they think they are receiving the best rate they can get, or it’s to time consuming. That is not true and could cost you a great deal.
Did you know banks typically send out a mortgage renewal letter out approximately 15 to 20 days prior to the date of renewal? Why is that do you think? Simply put it just doesn’t give the client much time to research the mortgage market and collect the proper documentation for the new lender thus reducing the chances of the client moving their mortgage to the new lender. It’s quite smart on the behalf of the banks.
Remember, banks make billions that’s right billions of dollars per year and everything they do from sending a mortgage renewal letter out two weeks prior to renewal to putting posted rates not discounted rates on the renewal letter is calculated, well thought out and will tend to favour them not you. I’m not saying that’s a bad thing, they are a business and making money is what they need to do. All I’m saying is be cognizant of it.
So how do you tip the odds back in your favour?
Start by giving yourself the luxury of time. Personally I know the more time I have the better the decision I make. Think about it for a second. This is most likely the largest debt you have. Do you really want to make a rushed decision?
How much time is enough time?
Definitely over a month but I tell my clients four months prior to your renewal date is optimal. Four months may seem like a long time but what it does is
give you ample time to collect paper work you may need to give us for the new lender,
gives you the opportunity to think and ask yourself if you’d like to do changes to your mortgage ie take money out for possible renovations,
gives us and you the time to research the market and really get the best deal for you
gives you a guaranteed rate for four months. That’s great if rates stay the same or go up. But what if rates go down? No problem I’m always looking for the best deal and if a different lender is offering a lower rate I will contact you and with your permission move your file to them.
So as you can see with a few changes you can take back control and power of your mortgage. Give us a call and let us help you get the best mortgage possible.
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Bello Mortgage Corp.