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Doing a Mortgage Check-Up

Posted On: 2010-07-13

While many Canadians visit the doctor every year for a physical checkup, very few review their Mortgage annually as well. Plenty can change in a year in today's fast pace lifestyle, and as such mortgage holders should review the current interest rate market and new product availability that may better suit their current needs. A career change, kids, retirement or newfound money, or a major event is on the horizon, they all can affect the type of mortgage that fits just right.
 
Managing your financial lifestyle is just as important as managing your exercise and diet. Many people just wait 5 years and for the renewal note from the bank before acting on their mortgage, missing out on rate holds that could be in place many months prior to the actual maturity of the mortgage!  Even more mortgage holders do not rate shop or challenge what was sent to them by the banks, in terms of rates, and many are overpaying.
 
Refinancing and renewals at maturity are the only time as owners of a mortgage you have the ability to shop around and improve your financial situation by decreasing the cost of your mortgage.
 
Even though banks are in the business of getting as much interest from you as they can, many will allow people to pay a lump sum of the principal on the mortgage's anniversary and increase their monthly payments. An extra $100 a month on a standard $200,000 mortgage could save almost $18,000 in interest and shorten the amortization period by about four years, so as your financial mortgage advisor, we can set up a mortgage to minimize the amount of interest you will pay to the banks.

Even something simple such as making renovations could affect the type of mortgage desired. For example, topping up or refinancing an existing mortgage can pay for renovations, providing you're comfortable with a blended interest rate. If you're buying a new home, you may be able to port your current mortgage. Or maybe you just want to consolidate higher-interest unsecured debt into your mortgage. Rolling that debt into your mortgage can significantly save on interest costs and that will help you get out of debt sooner.

A mortgage can also help you become more tax efficient if you're thinking of investing in a business, buying a rental property or putting some money into mutual funds or the stock market. That's because the interest paid on money borrowed on a principal property can be written off against revenue from those investments.

But the biggest reason for making changes to your mortgage mid-stream may be because it could be a lot easier to do something before your situation changes. "Making changes to your mortgage before you go into a new venture, ie: going Self Employed ; or before you retire would allow you to qualify much easier rather than waiting for your mortgage to come up for renewal!

Rod Minnes, Managing Broker

Global West Mortgage

At Global West Mortgage, we look forward to working with people and helping them determine the right financial path for their mortgage and property investments.  At a time when the cost of living and taxes are rising, we need to look for  ways to save money, and our mission statement shows you why we will look after all of our clients needs.
 
A customer is the most important visitor to our business.                    
They are not dependent on us. We are dependent on them.

They are  not an interruption in our work.
They are the purpose of it.

They are not an outsider in our business.
They are part of it.

We are not doing them a favor by serving them.
They are doing us a favor by giving us an opportunity to do so.
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