By Steve Lemieux

Do not sign renewal papers. DO NOT SIGN MAILED IN MORTAGE RENEWAL PAPERS! I can’t say enough times. When your mortgage comes due for renewal and the bank sends you those mortgage renewal papers, it is a very common mistake for the homeowner to simply sign them and mail them back to the bank. You have to remember that the banks are in business to make money and if they can give you the squeeze for 1 or 2 percent extra on interest rate, they cash in – big time! Thousands of dollars over a couple years term. Multiply this by several hundred, thousand and tens of thousand of customers… well you get the point, were talking millions of dollars in easy profit.

The smart thing for you to do is:

Keep track of when you mortgage come up for renewal. When you are getting within 6 months of the current term expiration date, start keeping an eye out on current interest rates. Particularly look at mortgage broker "best" rate advertisements. These are usually the lowest rates available; normally a full point (1%) or more bellow regular bank rates.

When you get nearer to the renewal date, 4 months or less to go, you should be able to shop around and lock in a rate with a lender. This will make sure when the time comes, you will be guaranteed that low rate. Also make sure you deal with a lender that will adjust that low rate, should rates drop even further within that 4 month period, to the newer, lower rate.

It would be beneficial for you to work with an experienced mortgage broker. They will pull your credit report once and have access to several, sometime hundreds of lenders to shop your mortgage with. No multiple credit bureau inquiries, just once, used efficiently.

Some people feel the need to be loyal to their bank. Little do they know, the banks have ZERO loyalty to them. I’ve been in the industry for over a decade and the story is the same every time, the rate offered to so called "VIP" customers is way over the discounted rates available through mortgage agents. It is just not in their best interest to give out low rates. They are in those big fancy building to do one thing: MAKE MONEY.

One thing I do not want you to do, and I’ve seen people do this, is to lock in a rate with a nice mortgage broker and when the time comes to renew the loan, go down to you bank who then matches the discounted rate and steals the deal from underneath the mortgage agent. This is a disgusting, low down thing to do. Don’t do it. You have to remember that those banks were trying to rob you until that mortgage agent helped you get that low rate. Is that any way to thank him/her? No. Not at all. Be honourable. If you insist on having your mortgage with a certain bank, you should still work with a mortgage broker, but tell them what you want to do up front. I have personally worked with clients in such a dilemma and it can be very rewarding for all. This is how I usually handle it: I give them a commitment letter for the discounted rate. They go to the bank they absolutely insist on and show them the letter, Of course, the bank matches the low rate to keep them as customers. I find those kinds of customers are set in their ways and I would loose them as customers anyway, so I might as well try and turn them into an asset. These people are usually very grateful for this gesture and end up being a great source of referrals, and personal friends. If a mortgage agent works with you in such a manner, you should refer everyone you know to him/her.

All in all, the best thing you can do is to prepare the best you can to get the best rate possible. Don’t wait until the last minute, or you’ll be in your banks ballpark and that’s not a good place to be. You’ll have no negotiating strength and have to settle for whatever they give you. You’ll also want to verify the rules, procedures, lender guidelines and product availability in your part of the world. They are different everywhere. Working with a true professional will make all the difference in the world. A local mortgage specialist in your neck of the woods will be your best ally in getting the answers you need. Most work free of charge to you. The lender who ends up with your mortgage pays them a commission for bringing them the business. For a lender, paying mortgage agents to bring them deals is MUCH cheaper than having a big fancy building full of employees.