Questions to ask your broker when renewing your mortgage!

[LAndersen]

I know if has been mentioned that their are certain questions to ask your broker to ensure you get the best product and rate when it comes time to renew. Unfortunately, I just don't remember what those are. Can anyone please help me out. Don and Russell have talked about these a few times but my mind is just drawing a blank right now.

 

[jasonpeters]

Hi,



Here are some tips that you need to remember:

1. The posted rate isn't the best rate

2. Shop around before you negotiate

3. Bank or broker? The general belief is that brokers can offer a better rate than banks due to their access to multiple lenders.

4. Being good and loyal to your bank makes no difference to your rate

5. Check the terms before you sign



Have a good day!

 

[Thomas Beyer]

More important than asking the broker about rates and options is to know what you want.



If you may sell the asset 2-3 years from now a five year mortgage may not be the best solution due to high payout penalties. If you envision flipping it within a year then using a closed, as opposed to open mortgage, is also not a good idea. The biggest decision, assuming a 5+ year hold is fixed vs. variable and a broker can not really help with that decision. For example right now five year money is in the low 3's but variable is prime minus 0.4, at least 0.5% or 16% cheaper. Will prime go down within the next two years ? Possibly ! Will it be higher in five years ? Maybe.



So, ask away, know what you want, take an educated guess at interest rates 3-5 years from now, make an educated guess on asset disposition and then make the best decision with the information available.

 

[LAndersen]

Thank you Thomas. Your advice is great coming from one with lots of experience and I really appreciate it. We renewed this week with a variable rate on this property as we plan to hold for 5 more years. I appreciated your book. When will we see the next one?