Know Your Mortgage Before You Sign on the Dotted Line

A client friend called me today to see if it was a good time to convert her adjustable rate mortgage into a fixed rate.  She told me that her sister had a mortgage at RBC and had just been offered a fixed rate of 4% to convert her adjustable rate mortgage.  When I looked up my client’s file I was able to confirm to her that she could convert into a fixed rate of 3.09% (for same term as her sister’s).  She was pleasantly surprised, comparing this to what RBC had offered her sister.  I explained to her that because I had placed her with a better lender/product, their conversion policy was much more consumer friendly and advantageous to my clients than what is offered by most financial institution (FI) retail branches.  Whereas almost all FI branches do not have a "guaranteed lowest available rate" when locking in (converting) into a fixed rate from an adjustable rate, most of the broker friendly lenders in the market do have this policy.  Typically the retail FI branches have a "posted" set of rates that they start their negotiations at with customers.  When you are already into an adjustable rate mortgage and want to convert into a fixed rate, you don't have much of a negotiating position anymore!  When you work with an independent professional broker that truly takes your interests first, you always win!  Converting (locking in) an adjustable rate mortgage into a fixed rate is an important feature that your mortgage professional should review with you at the time of originating the mortgage.