In today’s market, there are many people who shop endlessly during the first purchases for their mortgage while accepting the first offer of the bank during mortgage renewal. However, often the first offer is not the best offer to go for. Even today, banks mostly begin renewal offer at posted rates.
It is seen that almost 60 percent of people sign back renewal letters without considering the availability of other offers. Hence financial institutions find it difficult to offer incentives for their best offer.
The thing that needs considering is the fact that the arrival time of renewal letters is usually about three weeks before the actual renewal of the mortgage. Hence there is very little time to make use of the lower rates that were available in the previous three or four months or make arrangement to finance with another lender.
Consumers are required to pre-approve 90-120 days in advance of their renewals with other institutions before the actual renewal date. This provides them with immediate benefit of having the lowest rate available on the market for the longest duration possible prior to the actual renewal date. The best thing is that it is completely free and there is no obligation associated with it.
As the mortgage is paid off for the first time by a borrower, much of the blended principal and interest payment fulfils the interest. With time, the interest gets lower while the principal keeps increasing. This type of blended payment has great implication to the borrower of mortgage.
It is wiser to shop the market before the existing mortgage holder sends anything to you. The different documents that will be required at renewal time are as follow:
· A letter from your employer on the company letterhead with your name, base salary (or hourly rate), normal working hours per week, length of service and position held.
· For self-employed or commission sales, personal tax returns together with the Notice of Assessments for three years.
· Completely filled standard mortgage application.
· The recent property tax receipt after knowing the charge of land/Mortgage.
Mortgage is a serious financial decision that should be taken with care. You should see that the institution you are placing your mortgage should provide you with the best combination of rates, features, and services. Don’t you think that had your current mortgage holder really wanted to keep your business, they would certainly have given you a competitive rate at the very outset?
Always remember that working with the very best mortgage people has the dual advantages of their education and resources and in the process saves you lot of money. Certainly a qualified borrower can ask for the best.