Mortgage Renewal?

Question

Three years ago my wife and I bought our first home. (I should say we are in Canada so we were not involved in the US problems) At that time we were given a 20 year mortgage with a locked in rate for the first 4 years.

We have had no problems making our mortgage payments and paying our household bills but we've had a couple of little hiccups with credit card bills (a few late payments but not much worse then that).

Our mortgage comes for renewal next year and at that time the rate will be adjusted to what ever is current at this time. Other then a change in the rate I'm wondering if it would be possible for the bank to pull our mortgage at that time because of the credit card issues, no matter how minor they may have been. We are now well on the way to paying off the bills (only about $7000) and paying down the cards to $0 but I still worry.

Am I being too concerned over nothing?

Answer 1

it still depends on which index you adjust to. Try to refinance the note to a totaly fixed rate if you can. The terms of your currrent note will tell you and should also state the max it can increase

Answer 2

I've been told more than once that renewing is no big deal, that if your payments were made on time they just send you the forms and you renew with no real issues.

I'm not sure I believe that, but there's no reason to sit around waiting for bad news too late to fix it.

Give Equifax and Transunion a call and request your free credit reports (they have automated telephone systems that you can request your credit report through).

Equifax: 1-800-663-9980

Transunion: 1-800-465-7166

Your reports (request your report and your wifes) should arrive in about a week if all goes well (if you run into a snag you can request them by mail);

http://www.equifax.com/EFX_Canada/consum...

http://www.transunion.ca/ca/personal/cre...

http://www.creditbureau.ca/ENGLISH/your_...

Once you've received your credit reports you can comb through them looking for inaccurate information (dispute this immediately with the form they include with your credit report) and locate any late payment details. If you're still a customer of the creditors that are showing late payments then contact them directly and ask that they remove the late payment information from your credit report, as you've been a loyal customer etc etc etc. It may not work, but then again it may. Definately worth trying if it shaves even a bit off your mortgage rate.

Use your credit report and this FICO score estimator as you progress through this to gauge your score. When you've gone as far as you can cleaning things up go online and pay for your credit score from Equifax and Transunions websites so you know PRECISELY where you stand.

http://www.bankrate.com/brm/fico/calc.as...

You may only improve your credit score by a few points, but those points may be enough. If it's not going to be enough you can consult with a mortgage broker and see what options are out there for you.

It's good to worry, it's better to be prepared.