Posted on: 22-01-08 22:58:44
In a few months, my mortgage will come up for renewal. I have no experibence or knowledge about mortgage renewals.
Can you please help me with these questions?
1. How do I renew it, will I be contacted by the bank?
2. What will be my new interest rate be, if it stays in current market rate?
3. will my credit score affects the process?
4. is there an advantage to hiring a professonal mortgage broker.
5. The interest rate is 5.1 and i pay something like 1650 per month. Will I be able to keep it below $2000 if the rate goes little bit higher.
Thanks in advance.
sameer.
Quote:You will most likely get a letter from your current lender a couple of months ago, offering a rate for your renewal.
Originally posted by sameer03
1. How do I renew it, will I be contacted by the bank?
This offer may or may not be attractive/competitive, but you will likely get some sort of offer.
You may also get offers from other banks or financial institutions you deal with, if they know that your mortgage is coming up for renewal.
Remember - these are initial offers only and are candidates for negotiation.
Quote:You could go variable rate, in which case you will be at current prime less a certain percentage.
2. What will be my new interest rate be, if it stays in current market rate?
Your effective at any given point will be the prime, less the discount.
Quote:Yes
3. will my credit score affects the process?
Quote:A broker is able to shop multiple lenders/banks at the same time.
4. is there an advantage to hiring a professonal mortgage broker.
If you wish to shop around, it is better to have a broker than trying to do it yourself.
Quote:It depends on what rate you are paying.
5. The interest rate is 5.1 and i pay something like 1650 per month. Will I be able to keep it below $2000 if the rate goes little bit higher.
If you go variable and for some reason interest rates shoot thru the roof (unlikely), then your payment could go anywhere.
If you are concerned about your monthly payment and cash-flow, it's better to fix your mortgage rate.
You can always increase your amortization period to keep the payments low[er], but you will end up paying more interest eventually.
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