Beyond the Rate: 8 Questions to Ask Before Your Next Mortgage Renewal
This post is written by Trusted Partner, Keith Uthe – Mortgage Alliance Enrich Mortgage Group. To become a contributing editor, please contact our Real Estate Investor Solutions Specialist, David Maxwell at david@reincanada.com.
Are you concerned about mortgages, rates, and mortgage renewals?
The current sentiment is one of uncertainty, and we know that while others sit on the sidelines due to this uncertainty, informed buyers and investors are looking for opportunities. For any buyer or property owner, it is essential to remember that a property is not a short-term investment, whether it is your primary home or a rental property. What is more critical is understanding the strategies, options, and opportunities that are available to you and will best serve you in the long run. The biggest mistake I see borrowers make is focusing only on the rate, which is essential; however, it’s about looking only at today and not to the future.
You must ask: How will this mortgage serve me or hinder me in the future, based on the terms being offered?
- Does it have a clause that prevents the ability to refinance during the term (known as a bona-fide sale clause)?
- What is the payout penalty if I need to sell or refinance the property before the end of the term? Do you know if a discounted rate penalty would apply? (Will cost you 3-4 times more)
- What are the prepayment privileges monthly and annually? Some lenders are 10/10 while others are 20/20 or 20/25
- Is the mortgage an Insured, Insurable or Conventional mortgage
- Is the mortgage portable?
- If you need to make improvements to the property is adding improvements cost to the mortgage possible?
- If there is a cash-back offer, what are the guidelines that accompany it? There is always guidelines
- Is the mortgage readvance-able with a HELOC? Are there limitations to accessing the HELOC
If some of the above do not meet your needs, concern you, or are not what you want, then that is when you need to understand the Strategies. Options and Opportunities available to you. most borrowers have at least five possibilities available to them at renewal. Depending on property type, location, debt servicing and credit those options will vary for each borrower which si why a detailed discussion before your mortgage renewal is critical to ensure you are making an informed decision.
My vision is that ‘All People are Living a Life of Opportunity,’ and the only way I can fulfill my vision is to speak with borrowers seeking guidance, knowledge, and understanding so that they can make a decision that will help them create a Financially Secure life by design.
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