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28 Feb

RENEWING THIS YEAR? TIME FOR A CHECKUP

General

Posted by: Tracy Luciani Price

Everyone with mortgages renewing this year out of five year fixed rate mortgages will be getting a pleasant surprise.  Their new mortgage rate will be cut in half.  The problem for most of these homeowners has been they couldn’t’ get out (pay out) these mortgages earlier because of stiff penalties.  Some of the major banks are charging the difference between the posted and discounted rates meaning the penalties didn’t make sense to pay out even though we were in a unprecedented time in our history when rates have been declining every year. 

The time is now to contact us about  getting a locked rate for the next 120 days to protect yourself in case rates rise in the spring.  It’s surprising how many people don’t take a few minutes to get a mortgage check up prior to renewal. We like to start about six months prior.  If there is something negative reported on the credit bureau we help you get things cleaned before your mortgage renews.  

This is exactly what we are doing for our client Dulcey.  We called her to see how things we going because her  5.79% five year mortgage (the best rate at the time) renews in May.  Unfortunately, she had a setback  when her hours were cut to a four day work share during the recession and as a single wage earner, she fell behind on some of her credit cards.  The credit card companies didn’t have much sympathy for her position and they put her into collection on her cards.  Dulcey is back to full time hours but she can’t get ahead enough to pay her debts off.  So we arranged a private second mortgage (no bank will touch you when you are in this position)  to clean up her $20,000 in credit cards.  She can easily afford the monthly payment of $233. per month and over the next six months her credit will steadily improve.  Now when her mortgage matures we will be able to refinance her 1st mortgage and her 2nd mortgage together and with the new five year fixed and variable rates hovering around 3 %, Dulcey’s new mortgage payment will be be less than she is paying now and with zero credit card debt.