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Mortgage Renewals: Advantageous Opportunities for Your Home Financing Plans

February 28, 2012 | Comments: 0 | Views: 146

So, there is that nagging feeling again. You know you have been putting something off, but cannot quite remember what task that was. Something fun? No, we dragged out all the board games last night for an after supper family fun night and got trumped by the kids again... who knew they were so good with strategy? Something practical? No, the fridge is full of food and so is the pantry, the kids are happy and watching a cartoon on TV, the spouse is finishing up a little bit of housework, every alarm's battery's been checked, the garbage's been picked up, the dog has had his bath, the plants are watered, the clothes washed, the mail checked. Better double-check.... just the same old bills and flyers as usual-hmm, here is a letter from the bank-3 months until the end of the current term on the mortgage. Huh? Oh, just a friendly reminder about mortgage renewals.

Hmm... Should You?

At the very least consider the advantages and disadvantages of mortgage renewals. Advantages include:

Paying a lower interest rate than you currently are;

Changing from a variable to a fixed rate of interest;

Speeding up your amortization period by changing the frequency of payments;

Increasing the value of your payments to pay down even more principal reduces the amount of interest you would have otherwise owed.

Keeping thousands of dollars in your pocket because you are paying a lower rate which will eventually lead to paying off your mortgage sooner.

Are there any disadvantages?

With a little research through websites of mortgage brokers and financial lenders and in talking with friends and family you might be shocked to find that there are few to no discernible disadvantages to mortgage renewals. Fees may be paid for by your lending institution and there are no penalties associated with mortgage renewals. You can ask for the lender to pay the fees, play on their sense of competitiveness against other lenders. This is a great opportunity to help you save money!

How do I prepare myself? What do I need to know, do and have ready?

Other than spending a little time getting some paperwork assembled, (i.e., copies of your current insurance statements, an appraisal report, your property title, mortgage charge and annual mortgage statement as well as a verification of income),the whole process should take a little under a week to complete.However, do not go into a consultation (or negotiation) without some assurance that your income is in fact stable over the long-term payback period. There will be nothing but trouble if you renew your mortgage to a lower rate and suddenly cannot make the payments. Make sure your employment is secure.

"I do not know... seems like there's too much work involved with mortgage renewals, I just do not have the time." Apparently, it is just that kind of attitude that the banks are preying on to get you to renew your mortgage and pay a higher rate. Even though you might have checked out some medical websites when you needed information, you still booked an appointment to see your doctor. So why would you financially diagnose yourself and then just hope for the best from the bank-- consult a mortgage professional about mortgage renewals. Money you save in troubled economic times is still money.

Source: EzineArticles
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