With mortgage loans considered by banks and customers to one of the safest there is, mortgage loans have traditionally been among the most popular types of loans taken out by people. For that same reason many people choose to renew their mortgages once the term of their previous one has ended.
Mortgage renewal is one of the biggest financial decisions a person can make, almost as big as taking one out in the first place.
Unfortunately some homeowners fail to take proper advantage of the fact that their home equity has grown since they first took out their mortgage and are now in a firm position to negotiate the terms of their mortgage renewal. Many homeowners opt instead to renew their current mortgage agreement— often to their disadvantage.
Before being quick to renew your mortgage, here are some factors that you should take into account:
- What’s the offered rate? Always ask for a better rate than that which has been offered. The posted rate is used by banks to provide clients with a value proposition, and they expect to hear a counter offer on what they send you.
- Where’s the better deal? Just because you took your mortgage out with one bank doesn’t mean you have to renew it with them. Figure out whether you can get a better rate from your current bank, a new one, or from a broker.
- What are the terms? Although the lowest rate may look like the best choice, that’s not always the case. You need to know what penalties you’ll incur if you break the mortgage prematurely, whether you can pay extra each month, and if you can skip a set number of mortgage payments over the course of your term without penalty.
Like any contract, make sure you know the terms before you sign. The last thing you want when renewing your mortgage is a surprise, so make sure you know all your options before committing to one.
If you’re looking to renew your mortgage, but want to make sure you get the best terms for you and your home, be sure to give Sky Financial – The Mortgage Centre a call today at (780)486-6639.