Is Your Mortgage Up For Renewal?

 

MORTGAGE UP FOR RENEWAL

The biggest monthly expense for most Canadians is their mortgage payment.

Yet according to an Angus Reid survey, almost 27 per cent of households automatically renew their mortgages when the term is up instead of trying to find a better deal.

Mortgage renewal

If your mortgage is up for renewal within the next 6 months you may want to start thinking about what you’re going to do when your mortgage term ends. While you could renew with your current lender, you may be missing out on potential mortgage interest savings. It’s most often in your best interest to see what else is available for you before you sign on the dotted line of any mortgage commitment. This week, we want to highlight the mortgage options you have at renewal time so you can make an educated decision on how to proceed into the next term of your mortgage.

Renew your mortgage with same lender

If you don’t want to make any changes to your current mortgage amount or amortization, a simple mortgage renewal could be the solution for you. Your existing mortgage lender will usually send you an offer to renew near the end of your mortgage term or maybe sooner, depending on your lender. This document will contain the different mortgage term rate offerings for you to choose from. The benefit of renewing with your existing lender is, minimal paperwork is required as most often you are not required to re-qualify for the mortgage and there’s usually no costs involved unless your lender is charging you a renewal fee. This is ideal if you just want to sign on the dotted line, though the downside is you may not have initially been offered the best rate available. Often the rates are negotiable and you need to be aware you don’t get what you don’t ask for, however, before having the rate talk with your lender do some research first to determine what exactly the “best rates” are for your current financial position.

Renegotiate your mortgage with a different lender

If you’re okay with your existing mortgage amount though looking at making changes to the interest rate, or other terms your contract does not offer, you may want to look at the possibility of renegotiating your mortgage with a different lender. If you’re going to look at this option, be prepared to provide updated mortgage application details as well as supporting documentation to your new mortgage lender. As you don’t have a mortgage repayment history with this new lender they will want to re-qualify you for the mortgage which will also involve ordering your credit report. Usually a mortgage “switch” doesn’t involve any costs charged by the new lender as they will cover them, though there may be some small administration costs of $200-$300 charged by the lender you are leaving.

Refinance your mortgage

A refinance is perfect for you if you want to access your home equity at renewal time. Refinancing your mortgage allows you to restructure your mortgage amount, term, interest rate and amortization. If you have sufficient equity available this can allow you to pay off debt, invest, renovate, and more. There are some costs related to refinancing your mortgage which may include appraisal and legal fees, though they usually aren’t as high as what you paid when you originally purchased the home. Some lenders will also offer to pick up some of the costs to their refinance customers or offer some small cash back amounts to help reduce any out of pocket costs that need to be paid. You can also discuss other options including paying some of those costs from your refinance funds at closing time.

The next step is deciding on which of the 3 ways you want to access your equity at renewal time;

  1. Restructure your first mortgage to accommodate the extra funds you want out of your home.
  2. A second mortgage will allow you to leave your first mortgage details the same, but access equity by obtaining a 2nd mortgage behind your 1st one. Be careful though, as 2nd mortgages may come with higher rates and possibly fees.
  3. Or, if you qualify, a home equity line of credit could be the solution you’re looking for. It can be registered behind your first mortgage and offers a variable interest rate, an open term and interest only payments.

A lot can change during the term of your mortgage including income, assets, debts, and financial profile, among other things. It’s never a bad idea to give your mortgage a check-up at renewal time to ensure it aligns with the financial goals you are trying to achieve. Don’t be afraid to explore how you can make your mortgage work to your benefit by partnering with experienced mortgage professionals at YourMortgageNow.ca. Devin and Wes are Trusted Saskatoon‘s Mortgage Associates who specialize on the perfect financing solution for your unique financial situation.

Wes Will Mortgage Broker Devin Cristo Mortgage Broker

Mortgage Advice Buy a Home Sooner to Build Equity

It can be very beneficial to buy a home you can afford sooner rather than later. A home allows you to build equity and with every mortgage payment you make each month, you are building equity in a place of your own – unlike a rent payment.

Mortgage Advice Buy a Home Sooner to Build Equity Equity is the difference between the value of a home and your outstanding mortgage balance. The longer you stay in your home (and the more mortgage payments you make), the more equity you’ll have. Unlike most things you buy, a home will almost certainly increase in value over time – which builds even more equity.

Once you’re a homeowner, the payoff can be great. As the equity in your home grows, your financial flexibility also increases. Think of it as an extra source of financing for when the unexpected happens. An added benefit of borrowing money against the equity in your home, is it usually comes with a lower interest rate than other forms of credit, such as consumer loans, lines of credit and credit cards.

Here are some ways you can use the equity in your home:

  • Pay off other debts with higher interest rates (like credit card debt)
  • Renovate or repair your home – build a new room or put in a swimming pool
  • For important life events – a wedding, dream vacation or university tuition
  • Purchase a second home or vacation property
  • Emergencies – like a serious illness

Investing in a home can have a significant payoff over time. And the sooner you begin, the sooner you’ll start building equity.

 

Devin Cristo & Wes Will are Trusted Saskatoon Mortgage Associates of YourMortgageNow.ca

6 Tips to Help Renew Your Mortgage

The biggest monthly expense for most Canadians is their mortgage payment. So
before you decide to renew with your current mortgage lender, take a look at these tips to help lower your payments come renewal time.

1. Get Started Early
Start shopping around for a better rate four to six months before your mortgage is up for renewal.
This is the longest lenders can guarantee a discounted rate. If your current lender’s rate rises, you have your guaranteed rate to fall back on.

2. Do Your Homework
Find out what other lenders are offering before you negotiate a lower rate from your bank. View our current rates at www.www.yourmortgagenow.ca

3. Never Accept the Bank’s Posted Rate
If you don’t ask for a better rate, you won’t get one. If you current lender has the best mortgage features, advice and policies, ask your bank to match a competitor’s lower rate.

4. Negotiate on other Available Options
The amortization period, the rate type (fixed or variable) and the flexibility of the payment schedule can also determine ways to lowering your costs, not just the interest rate.

5. You Can Change Lenders
A lot of people renew with their lender and don’t even think about switching to another one. You could be missing out on what other financial companies are offering, plus there is no penalty if you switch at renewal time.

6. Use a Mortgage Broker
If you don’t like negotiating and don’t have the time to research rates, a mortgage broker will do ALL the legwork for you — even without charging you anything, since they are paid a commission from the lenders.


Did You Know
Saving even half a percentage point on your mortgage rate can save you up to $10,000 over 25 years (based on a $150,000 mortgage).


If your mortgage is coming up for renewal in the new year or you have questions about your current mortgage, contact us today!

Things To Do Before You Renew Your Mortgage

If you have a mortgage coming up for renewal this year, it’s a good idea to check on a few details well in advance of your current term’s expiration date.

For example, determine whether you need to produce new documents to verify ownership before you get your new financing in place. An old property survey or condo agreement that is outdated and/or in need of correction may require official amendments before you can secure your new mortgage. Since such documents can take time, it’s wise to keep an updated file of all changes to your ownership status and have it ready when it’s time to renew.

Is your mortgage up for renew? Make sure to contact us to secure your low interest rate! (306) 244-7755 or devinandwes@www.yourmortgagenow.ca