Natasha Shaw

Who do you sign with?

There is a common misconception that people only use Mortgage Professionals/Brokers when they either have bad credit or no credit.

Regardless, once a deal is signed, the mortgage professional transfers your file to the lender and you deal directly with them for the administration of your loan and banking needs (likely, they’ll upsell you on a credit card, line of credit, bank account, etc.)

Fast forward five years...

It’s time to renew your mortgage.  Do you renew with the lender, or your broker?  You may be earning more money, have a stronger or more established credit history and are more “bank friendly.”  Might as well just stick with what works, right? Why go through the hassle of re-applying?  You don’t “need” a mortgage professional anymore.  Or do you?

Another common misconception is that your lender will “automatically” renew you and will offer you the best deal.

Unfortunately, this couldn’t be further from the truth!  In fact, the lender is not under any obligation to renew your mortgage.  If you’ve been late on a payment, had a change in life situation or there is an unfavorably economic condition in your area, they can elect to call your loan due!  Yikes!  In reality, this doesn’t happen often.  More commonly, the lender will offer a subsequent term at a reasonable rate without administration fees (provided you sign within a specified time frame.)

But consider, worst case this does exist.

Although this may seem like the most convenient scenario, it is still advantageous to consult with a broker for several reasons:

• A broker works for you. The relationship doesn’t end at the deal.  Mortgage professionals regularly access and analyse your scenario to ensure that the most amount of your monthly payment is being applied to your equity, instead of interest.  As new products become available, your current offering is being regularly benchmarked to ensure you are utilizing the best product and offers.

• An institution can only offer you one solution.  Theirs.  A mortgage professional provides an unbiased opinion and has access to a variety of lenders and products that can better accommodate your needs.  You may have been matched with one institution during your first term but be better suited to another the next.  A broker has the ability to assess your needs on a regular basis and make sure you are connect with the best solution for your renewal.

• It’s smart business.  It’s important to explore your options and see what’s available to you at any given time.  Just like you spend time shopping for a car, so should you for your mortgage.  Even more so in fact.

Are you approaching term?  Need to know your options?  Contact me anytime at 1-888-378-2821 or via email mtg@natashashaw.com.

More Articles of Interest:

• How do Mortgage Renewals Work? 
• Why Refinance your Mortgage?
• What is Cost-Benefit Analysis?