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Mortgage brokers: your best bet when renewing your mortgage

August 1 2016 by Denis Doucet
What you'll learn
  • Shopping for a mortgage online: is it worth it?
  • How your credit rating impacts your mortgage
  • How to reserve the best rate

Your mortgage term is coming to an end within the next few months and your financial institution has sent you the renewal document by mail. It’s ‘simple.’ All you have to do is sign at the end of the document to get its best rate.

The operative word is ‘its.’ In fact, you may not be getting ‘the’ best rate on the market. What’s more, the rate your financial institution is offering may not be adapted to your current situation.

My online rate is lower than yours

For the past few years, financial institutions have evolved in an ultra-competitive market. They are waging a very aggressive war to win over your mortgage. In this quasi-jungle, your mortgage broker can help you obtain the best offer possible.

Mortgage brokers represent, on average, around twenty different financial institutions; however, his or her role is to serve YOU and not the lender. When you begin shopping for your new mortgage, you may find preferential rates that are below the one your mortgage broker has recommended. The reason: the rates displayed online is not the only factor to take into account.

Because the interest rate plays a major part in the overall negotiation, your mortgage broker’s role is to evaluate your needs based on your current situation. For example, if you’re already in the process of selling your home, you may be willing to settle for a higher interest rate on your monthly payments in order to avoid a $10 000 penalty once your house is sold a few months down the line.

Also, don’t forget that your credit score also influences what interest rate you can get. Your mortgage broker will look into the best options for you as he or she will take care of the entire mortgage process.

Get a head start and reserve an interest rate

You don’t have to wait until your financial institution sends your renewal notice to start looking around for a new interest rate with a mortgage broker. You should schedule a few appointments with various brokers before making your final decision. Don’t hesitate to ask them about other financial institutions and what professional contacts they have in the field. They will not be able to divulge the outcomes and specific issues of transactions made with other clients. However, they will nevertheless give insight into past experiences. This will help you just which broker will best suit your needs.

Just because you’re looking into a new mortgage rate doesn’t mean you have to jump in right away. You can reserve your rate that you want to maintain up to 120 days before the transaction. This option can reassure many a homeowner in a rapidly changing market!

So why should I work with a mortgage broker?

In sum, a mortgage broker works for your best interests and ensures that no matter how complex your situation is, you’ll be well-represented with various financial institutions when your mortgage comes up for renewal.

Key takeaways
  • Avoid wasting time and shopping for a new mortgage rate with 20 different financial institutions.
  • Reserve your mortgage rate with your broker.
  • A mortgage broker will help you find the best rate possible.
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