October 21, 2014

By Margaret H. Johnson

The great mortgage mystique is back in the headlines full of pros and cons, simple renewal forms and a set of dice to toss in the air – do you want to lock in or not?

One consistent theme has emerged: Do not blindly sign your mortgage renewal.

One of the first questions is this: do you want to pay off your mortgage asap and be debt free, or do you want to take advantage of low interest rates and not pay down the debt? Answering this question will help people decide their course of action.

The next question: do you want to lock in, for say, 5 years, to get the best rate?

This presents a bit of a conundrum today because we know the interest rates will likely go up soon, perhaps in 2015 as projected by some experts. So, what is the best way to protect ourselves?

First, take a look at your overall financial situation. How stable is your income? How much consumer debt do you carry? Do you have any other major investments?  Do you have adequate life insurance? Consider talking in some detail to a financial advisor/planner. This is a good time to get better organized or more focused.

Secondly, shop around. See what the best rates are. Call your mortgage provider to negotiate.

Thirdly, the banks want all of your business, not just your mortgage. Review the advantages/disadvantages of having all of your investments, loans, deposits etc. in one financial institution.

Some people only care about cheap rates and will aggressively search for the best rate. This does not always lead to the best mortgage. There are often hefty prepayment penalties for early pay-outs. Are you sure you will not be selling sometime in the next 5 years if you lock in?

There are many good reasons not to just automatically sign your mortgage renewal form from your financial institution. You can save a lot of money and improve your chances of achieving your financial goals with good advice and diligent research. 

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

For more information visit Debt Canada - your Canadian credit education centre.

If you are a woman in debt, speak with Women and Money first. We specialize in helping women with their personal and business financeMoney management advice you can count on!


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