Mortgage renewal is a time for you to go shopping! No, not for clothes but for rates! This is the one time when you are in-charge of how much longer you want to pay the rate and with what interest. Lenders are usually interested in taking on mortgage renewal clients as they have lesser risk involved and also have a good enough credit history. There are a few myths associated with mortgage renewal and the top five myths are debunked below.
- Your lender or bank will offer you the best rates.
If you have got a notice from your lender or bank with whom you had initially signed the loan deal, you are probably looking at a paper with the same rates as your previous plan or slightly lowered rates. Accepting the offer could result in a loss which you are unaware of. The mortgage renewal market has a lot of offers, rates, and plans which could beat the current one ten times over. You have to shop for the best. Mortgage Agents can help make your job easier.
- It’s better to get a mortgage renewal plan for a shorter term.
Mortgage renewal plans don’t have to be short. Yes, you can get rid of your plan faster and be a free bird. But what are the disadvantages? You have to pay higher rates and take a substantial sum out of your monthly budget for this. A moderate term with low rate is the most beneficial plan.
- Concentrating on the interest rate can get me the best plan.
Interest rates are only a small factor of the entire plan. You need to consider monthly payments, penalties and other hidden costs associated with a mortgage renewal plan. A lower interest rate stretched over an overly long period can actually cause a loss.
- Mortgage rates are same everywhere.
This myth stems from the ignorance of most citizens of Mississauga. They believe that the rates are not as different as portrayed and they won’t lose much if they don’t shop. If you work with a lender you can be aware of the ever-changing rates and plans.
- Hiring a broker is just expenses added.
Mortgage brokers don’t get paid by the client. They get paid by the lender. Unless there are special circumstances where your case is too difficult or you have extremely bad credit, the mortgage broker will get their income only from the lender.