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Refinancing a mortgage is inevitable for most people who own a home. Are you guilty of one or more of the following mistakes?

Accepting the written offer your lender presents to you

Lenders are famous for sending a renewal notice in the mail and asking you to select from a number of choices. Mail the commitment back and you are done. Sounds simple. Lenders are trusting you won’t comparison shop, and it is unlikely their initial offer is their best offer.

Not reviewing any potential changes in your current or future situation

Changing employment, getting married, having children, receiving an inheritance and retiring are all examples of changes that may impact what you should do on a mortgage renewal. If you plan to move in a year to a bigger home, you don’t want to lock into a long-term mortgage. Match your mortgage term to a significant change in your personal situation.

Not understanding current and future market conditions

Are future interest rates projected to increase or decrease? Is the economy heading into prosperity or a recession? Having some understanding of what is likely to occur in the future will impact your decision on variable versus fixed rates, short- or long-term commitments.

Not understanding how your mortgage impacts your overall financial planning

Your mortgage is probably your biggest liability, but it is often overlooked in financial and retirement planning. It should receive the same attention your investments receive. Having a strategy to manage your mortgage may free-up additional funds for investment purposes or whatever goal you seek to achieve.

Not obtaining independent mortgage advice.

A mortgage broker works for you not the lender. Their service is often free, as they are ultimately paid by the lender. Their advice will be unbiased and tailored to your unique needs. Why would you not make contact, have a discussion and ensure you have positioned yourself to improve your financial situation?

Always happy to assist with your mortgage needs. We welcome your comments.