 Renewing
Your Mortgage?
Avoid higher rates — avoid unsuitable products
and terms — don't be part of the masses!
Mortgage coming up for renewal...
Don't
be too hasty in just signing the form and sending it back to the lender.
Over 70% of mortgage holders do just that, and what is the usual result
— a higher rate and a mortgage product that might not be best suited to
their interests. Let me do all the work for you — we will find you the
best possible rate and product to suit your interests. Click
here to sign up for my Mortgage Renewal Registry.
You want 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" and it's a smart
way to reduce your interest costs. Invis 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 Provinces 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 dictate you 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 70% of
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 me 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. They do the research
for you, enabling you to avoid the frustration and confusion of having
to do it yourself, and explain the available options.
What terms and payment options
should you choose?
Mortgage Categories
Fixed-rate: 6 month,
1, 2 & 3 year (open, closed and closed-convertible) 4, 5, 7 & 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
risk 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.
Long-term
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 you payments will be and
you1ll be able to manage your budget accordingly.
Split-term
A mortgage which allows you
to minimize — or hedge — your interest rate risk by splitting your mortgage
into 5 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 year terms negotiated
at today's best 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.
Prepayment
Options
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 oday!
Payment
Changes
Most mortgages now allow the
amortization to be adjusted by increasing the payment on closed terms by
10% — 20% per year, once annually.
Payment
Frequency
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. The surprising
effect of this one extra payment a year is to reduce the amortization of
the average mortgage by approximately 5 years, with cash savings at the
end of the mortgage term.
Take
advantage of our renewal registry! Register now and we wil guarantee you
the best rate 120 days prior to your renewal. You can register up to five
years in advance - just fill out the form below.
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