Mortgage Renewal: Crucial Questions to Consider

Mortgage Renewal: Crucial Questions to Consider

By: Robert Floris, Lead Mortgage Broker with 30 years of mortgage experience

Ever try to Google for Mortgage Renewals? Wow, everyone claims to have the best and lowest mortgage rates! Somebody must be lying. Not everyone can be the best. What do they even know about my situation? Who can I trust?

Discussion on important considerations must be included when the mortgage is maturing. Included are real examples from our office for your thoughts.

Can I Improve my Cash Flow?

Whether your home, your business or the government, cash is king! The less you pay, the more you keep. Always think about cash flow.

Sara called our office to discuss her renewal that was coming up in five months. Should she do it? I did not answer her.

Instead, I asked her about her life:

• How was the money situation?
• How was work?
• Was she planning renovations?
• Did she have outside debts?

Well as it turned out, Sara was stressed and living paycheck to paycheck. She had $1300 in outside debit payments that was affecting her stress and health. We advised her to refinance to eliminate the high debt. The result?

She refinanced early with the bank, got her a better rate and her mortgage increased by $400. Was she happy? Well yes, with an extra $900 per month she could breathe again and her financial and mental health improved. The renewal of your mortgage is an excellent time to re-evaluate your current financial position and improve it. Cash flow is everything.

What is in My Mortgage Renewal Future?

Too many times we receive our mortgage renewal and we are quick to sign. Not so fast. As they say, “change is the only constant in life”.

It’s time to reflect? Of course. Does your roof need a replacement? Other renovations? Are you giving cash away with high credit cards? Do you have investment ideas?

Mortgage Renewal Example:

All was going well for Tom in terms of health and his profession and his mortgage was coming upon maturity. Tom contemplated his immediate future. His two sons were going to be ready for university but Tom was not ready financially. After a deep discussion regarding his needs, we came to the same conclusion: why not get a collateral mortgage! It was decided to add a secured line of credit if and when the boys left for post-secondary schooling. The credit is instantly ready not only for the university but can be used for other personal reasons. Tom is now financially ready for anything that life gives him as he is ready for change.
Does Paying my Home Fit my Goals

You’re 65 years old and have a $400,000 mortgage and you want to be mortgage free? It’s possible but not probable.

“If you don’t know where you’re going, you’ll end up somewhere else” – Yogi Berra, former New York Yankee

We all have goals to be in a home without a mortgage, but life gets in the way. Life challenges include careers, income, divorce, kids, debts and lately we’ve had a surge of adults taking in their elderly parents. At any fork in the road, you have to change direction. Every family has to re-think about what fits their needs at that time.

Another Good Example

Example: Josie and Sam did all the right things in life. They worked hard, paid their bills, raised two kids and put a little away for retirement. What could go wrong? The kids not only went to school but they wanted to earn their MBAs. The parents did not make much money so the added education along with much needed renovations did not mesh with their ages. Unbelievably, they were ready to retire and they had a considerable mortgage remaining. Their decision, renew the mortgage to the longest amortization so they did not have to struggle with day to day costs. I personally admired their flexibility to enjoy life now. They deserved it.

Best Rate or Safety – What is my Comfort Level

What is your best mortgage renewal rate? I want the best and lowest mortgage rate. Well, I can’t blame you. You’re only human.

I love the variable rate. History has proven it’s the best way to save money. Being in the mortgage market has allowed me to be very comfortable. Unfortunately, my belief is just that, my belief. The advantages and disadvantages are within my comfort level. Many of valuable clients think differently. They are not interested in business, or in following rates. Even my wife doesn’t want any risk, she doesn’t want to think. I guess opposites attract.

Many of valuable clients obviously want the best rates but are they going to take them at the expense of worrying? No. They know what they’re comfortable with and for that, I praise them.

Should I Be Loyal to my Bank?

The bank gave me an umbrella when it was sunny in my life. They took it away when it was rainy. How many times have I heard “I’ve been banking with them for 30 years and they did this to me”. We think the loan bank should be loyal, but they are not. The major financial institutions are in the business of making money, not providing social relief.

Here is my view, I am loyal to one impressive woman who understands I am the client. She returns my calls, accommodates my family and always goes the extra mile to serve my banking needs. Is it the bank? No. It’s her.

I am also loyal to my barber, loyal, and various other businesses that take care of me. It’s about the client, period. Do I really care what legal firm my lawyer works for? I think you know the answer to that.

My family gets my loyalty. Secondly, the people and not the businesses who take care of my family are who I consider giving my dealings to.

Final Thoughts

Your mortgage renewal is not just another paper to sign. It’s the time to ponder how to improve your life now or for the future. It starts with cash flow and ends with whether or not your decision will leave you better off.

Robert Floris has been in the mortgage industry for over 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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