Considering the range of mortgage options

I’ve been a mortgage agent since September 2006, and I find myself humbled to still be in this fun and exciting ever-changing business.

Like any other business it takes years to create a loyal following of clientele and I have the best clients on the planet as they refer their friends and family to me almost daily. My business really started rolling in 2007 and 2008, and many of those clients are coming back to me to renew their mortgages, but the lenders I sent them to oftentimes are not as loyal to their client base as they profess to be, which makes my job even easier to do upon renewal time.

Mortgage renewals for banks and lenders can be the most profitable kind of mortgage out there, and take heed – banks and mortgage lenders alike can be very aggressive in keeping your business.

Oddly enough, the most often asked question I get from my clients upon the renewal of their mortgage is, “Why won’t they offer me the best rate up front like you do, Jean-Guy? If they like me so much, like they tell me, why are we playing this back and forth negotiation, it feels like buying a car in the 80s?”

Truth is, banks and mortgage lenders know that Canadians can be very complacent thus they provide a very easy way of renewing the mortgage but offer a rate that is almost always higher than their best rate offerings, because they know that most people will simply sign it and send it back without as much as a phone call to double check their offering.

I have found over the past couple of years that the lenders’ rates can be 0.20% – 2.25% higher than the current best wholesale rates out there. And that many Canadians simply sign the form without researching or a simple phone call to their local mortgage professional to find out what they can actually get.

They advertise for you to be loyal to them, yet don’t provide the same respect to you with regards to offering you programs that are at market pricing, unless you call them on it. How does that make you feel? Most people get a bad taste in their mouth once they find out that the lender they were with, were offering them rates that aren’t even competitive.

The best part is, you don’t have to stay! There are lenders out there that want your business. When it comes time to renew your mortgage, you have options. There are lenders out there that will make your transition very smooth by paying for your switching/transferring costs, such as legal, appraisal and discharge costs, and then to top it off, they’ll provide you with the best programs and rates in the market. And you’ll get all of this for free from your local mortgage professional.

Here’s the kicker though, once you find out who has the best offerings, note that your bank is a rate-matcher, and not a rate-setter. You need to understand that they’ll match the rate every time if you give it to them. If mortgage professionals lost every deal that the bank matched, we’d soon be out of business, and if we went of business you wouldn’t have as many options in the future and the bank can go on their merry way and do the same thing they did to you as they did this time around.

Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres – Regional Mortgage Group.

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