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Mortgage Planning

You might be approaching the end of your first mortgage term and without spending too much time thinking about it, your intention is to simply renew your mortgage with your current lender.

That is certainly one option.  However, is it your best option?

Let’s back up to the time when we were purchasing our first house.  Remember the excitement?  Here was the opportunity to create our own personal living space.  The house that we had purchased was about to become our home.  Heady days indeed!

It is perhaps unfortunate that purchase is the word that we use to describe what we did when we acquired our house.  I say unfortunate because I believe that purchasing masks what we really did, and that was to make an investment in a property.

A house purchase is really the choice to investment in a house rather than to invest or spend your money in some alternative way.

The results from your investments generally benefit from your periodic attention.  In other words, don’t buy it and forget it.  Consequently, when your mortgage is up for renewal, it makes sense to consider the options that are available to you.  As mentioned above, renewing with the current lender is one option.  But it might be to your advantage to shift your loan to a different lender.  Why?  Perhaps a better interest rate or greater amortization options.

Alternatively, you might find that refinancing makes sense if you have need for some additional funds.  If you have sufficient equity in your house, refinancing can provide the funds needed to make additions or renovations to your house; eliminate other more expensive debt or make some other use of the funds.   Again, a different lender might offer a more attractive refinancing opportunity than your existing lender.

It is worthwhile to take the time to explore your options at mortgage renewal time.  A good choice today will be a reason to celebrate in the future.