Radu's Toronto Real Estate Blog [ Archives ] [ Top Posts ] [ Categories ]
Jul
16
Mortgage renewal in a booming economy
Written by radu
Email This Post
Print This Post
RSS 2 PDF
16
Today’s low interest rates have resulted in far lower mortgage rates than Canadians have enjoyed in many years past. However, we’ve seen a few modest increases in mortgage rates recently and there have been some predictions that thanks to a booming economy and the highest value for the Canadian dollar that we’ve seen in many a year, interest rates may also be on the rise within the year. There may never be a better time to lock in your mortgage rate.
One of the most common questions to arise at mortgage renewal time is, “Should I lock in the lowest rate mortgage available, or should I go for the longest term?†While each individual’s circumstances may vary, the general rule of thumb is, if you expect rates to stay stable for a prolonged period of time, then go with the lowest rate available and renew again while rates are still low. However, if you expect interest rates to rise significantly in the near future, then the prudent strategy is to lock in for the longest term possible. How quickly you expect rates to rise also plays a part. Even if we experience a continuous pattern of rate increases in the future, if the rise is fairly gradual you’ll still tend to do better to start with a short term rate and renewing for a longer term if the pace quickens.
Some financial institutions offer mortgage options that provide the best of both worlds. You get a very attractive rate upfront and have the option of locking in rates during the term of your loan. Your Coldwell Banker professional can advise you about some of the creative financing solutions available to you and help you explore your options before you commit to a renewal. Remember, you’re under no obligation to renew with the same lender once the term of a mortgage loan is completed, so it may pay you to shop around a little before you decide. Even if you do decide to stay with the same lender, you can sometimes negotiate a better rate than you were originally offered on your renewal notice.
Of course, interest rates are not the only factor you should consider before renewing or renegotiating a mortgage. Features such as the ability to pay down the principal and the frequency of your payment all have value. Your Coldwell Banker real estate professional can also advise you as to what impact various mortgage features may have if you decide to sell your home sometime in the future. You may even find that, with today’s very low interest rates and some creative financing, you can afford a move up to a better home with very little change to the mortgage payment you’re paying right now. Why not talk Radu and get the benefit of his expert advice?
Digg This! • Stumble it! • Save to del.icio.us • Submit to Reddit
Popularity: 1%
July 16th, 2006
(0) Comment[s]
Trackback URL
Filed under: Uncategorized
Tagged With:
Contact Radu
Related Posts
No comments yet.