You can’t turn on the TV or read a newspaper these days without hearing about interest rates and how you can renew your current mortgage at a lower rate. It’s true, rates are at an all-time low, but renewing your mortgage isn’t always about the lowest rate.
Sure, we will always make sure we make every effort to obtain the best rate on the current market for your renewal, but what if you need a little extra money? What if you are carrying a lot of higher interest credit card debt?
Let’s look at this case study and see how the current lowest rate option wasn’t the best solution for our clients:
Mark and Tracy were looking to expand their business and after exhausting family, friends and business partners they decided to take advantage of the low market rates and renew their mortgage, take out some hard earned equity and utilize the funds to expand.
After leaving the bank with their approval they were asked to pay down and close their line of credit, pay and close a car loan and when the dust settled their new 2.35% mortgage left no money to expand the business.
Mark called Freedom Lending and explained their needs and their current low rate mortgage offer from their bank. He stressed he wanted the lowest rate and the most money for his family business or he wouldn’t switch.
When asked about his needs it was discovered that Mark and Tracey really needed a lender that would extend past 70% loan to value and allow for slightly higher total debt service ratio in order to extract the maximum amount to invest.
Freedom Lending, through their affiliation with VERICO, was able to obtain a better offer from a Trust company that did not ask for all of their debts to be paid out and provided a rate of 2.89%.
Mark and Tracy quickly understood that often times the lowest rate option may not always make the most sense. Your mortgage and equity should work for you and help you accomplish you goals, improve your quality of life and enhance your family; it isn’t just about an interest rate.
When renewing your bank may take your total debt service ratios (TDS) into account when qualifying you, but with Freedom Lending we will think outside the box and look at ways to have your house lend you a helping hand.
Knowing your options when reviewing your mortgage refinance is one of the many things our lending heroes specialize in. We will walk you through the options, lay out a detailed plan on how you can use the equity you currently have and the new lower rates to your advantage!
You have questions and our lending heroes are trained to answer them! Pick up the phone and speak to one of our specialists with your questions or feel free to ask them any or all of the following;
- Should I get a fixed or variable rate?
- Why are terms and conditions so important when determining my mortgage?
- How much do I qualify for?
- What is my credit score and why is it important?
- Should I include legal fees, appraisal fees, moving costs and land transfer tax in my mortgage?
- How can I beat my bank?