Don’t sign those mortgage renewal documents!
I’m shocked at times to hear all the reasons why people don’t take the time to review their options when it comes to renewing their mortgage.
I get the feeling that people spend more time trying to find a deal on everything else they purchase but spend little or no time reviewing options for the single largest expense and payment they have. Many assume because they are a long time client of the bank, that they are getting the best possible rate, product etc. The truth is that the bank or institution could always do better with the rate and people are leaving thousands of dollars on the table. It seems as if it’s ok to give the bank more money than they actually deserve and people are ok with doing so.
Instead of renewing blindly, they should obtain a second opinion as did my client that I met with last week. She came to me with a renewal from her bank and I offered her a much lower rate which in turn saved her just over $4500 for the year. We transferred the mortgage completely free of charge and ended up switching to a variable rate because she mentioned that she would be looking to sell at the end of next year.
The reason for switching to a variable rate is that the maximum penalty that could be charged on a variable mortgage is 3 months of interest whereas a fixed rate mortgage would mean they would be subject to an interest rate differential penalty of at least $15,000 to $20,000. The savings are enormous and this conversation with the client took less than 10 minutes. Is it worth 10 minutes of your time to save this kind of money????
All the best,