Renewing mortgage. What should I consider?

It has been said that over 50% of Canadian mortgages are maturing in 2018 and 2019. At Robert Floris’ Mortgage Architects office in Hamilton, we thought we should share a checklist of five items to consider before signing a renewing mortgage.

Considerations

1. Educate yourself. There is a lot of choice in the mortgage market other than your bank. If your financial institution knows you are unlikely to shop around your renewing mortgage, they’ll have less reason to offer you a good deal on your renewing mortgage.
2. Another area to consider is your amortization. Customers will find the rates higher in 2018 than in years past. If you are struggling, you can ask your mortgage lender to go back to the original amortization to reduce the impact of the higher rates. Conversely, if you are doing well financially, explore lowering the years to pay off the renewing mortgage. In our opinion, this is where the big savings are.
3. A big dilemma is choosing between a variable or fixed mortgage. Again please be sure you understand how a variable rate mortgage works and the risks and psychology behind the rates. A lot of savings can be realized with a variable but if it stresses you out too much, please do not take it. Your health is much more important.
4. Renewing your mortgage is a great time to review your affordability and cash flow. As mentioned above, rates are higher in the mortgage business than in years past. Is there a project to be done immediately on the home? Is there outside debt that is currently affecting your cash flow. For most Canadians they are asset rich and cash poor. This is a great time to consolidate these areas to make your lifestyle more affordable.
5. The last item can be tricky to consider but nonetheless let’s consider our future and specifically:

• Job stability
• Children – are there future children in the home; meaning more daycare costs? Or are your kids going to require funds for post secondary education.

We hope this helps. Do not be afraid to call our office at 905-574-9200 extension 215 if you want to discuss and clarify your specific situation

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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Thanks for reading!