When you come to the end of your term but still owe a balance, you have the option of a mortgage renewal. This means that you will need to renew your mortgage for another term and each mortgage renewal comes with a couple of things.
The first is that it gives you the chance to assess your current mortgage. The second is that you can compare it to any new financial goals that you may have set for yourself and your family. Your mortgage provider will end up sending a renewal slip in the mail. All you have to do is sign it and send it back.
It is important that before signing, you make sure that all of your needs are met. There are actually a few steps that you should take to be proactive when it comes time for mortgage renewal.
Start the Mortgage Renewal Process Early
Make note of your current mortgage term’s maturity date and then count back 120 days. That is when you should begin the mortgage renewal process. This means that you could potentially renew with your current lender without having to pay any kind of prepayment penalty for breaking your term early.
If you don’t think you’re ready to sit down with a lender or broker quite yet, you can at least start to do the research necessary online. This will arm you with more knowledge when it comes to the negotiation process.
Consider Your Current Financial Goals
It is safe to say that a lot of things can happen over the term of a mortgage. Your financial goals at the beginning of the term could change substantially when the end approaches and may not match up. It could come down to things like receiving a raise at work, losing income, or hitting retirement.
When these things happen, it can result in substantial changes to your financial goals. Know what you are looking to achieve when it comes to the end of your term so that you can get the right mortgage rate, term, and product that best meets your current financial needs
Outline Your Needs
Financial goals are one thing, but you should definitely make a list of the things that you are looking for in your next mortgage product. Ask yourself a few questions like:
- Is there a chance you might be selling your home or moving in the next 5 years?
- Do you think you might want to borrow money to pay off your mortgage early in this next term?
- Do you think you will have the option of paying off your mortgage entirely in the next term?
- Do you think you may receive any bonuses or inheritances that you may be able to put towards your mortgage?
- Does your budget have room to increase your payment, allowing you to pay off the mortgage earlier?
These questions can help you determine not only the type of term and product that you want, but when you will be able to pay it off and how it will impact your budget.
Be Ready to Renew in the Last 30 Days
Legally speaking, your current lender has to send you a mortgage renewal statement at a minimum of 21 days before your term expires. Generally speaking, they will mail you a renewal for their lowest posted rate that is good for at least 30 days prior to maturity.
What this does is it protects you from any potential rate increases during that 30 day period. By this point, you should have your homework done and know whether or not you are getting the best rate possible or whether or not you can negotiate to a better rate.
Within those final 30 days, make your appointment with a mortgage broker to discuss what your current lender can do and what other lenders may be able to offer. Then comes time to make the decision: stay with your current lender or move on for a potentially better rate.
Switching providers may take a little more effort and paperwork, but it could provide you with better access to improved mortgage rates. The process can be painful without professional assistance, and that is why Superbrokers is here to help.
Mortgage Renewal rate discounting with Super Brokers starts between 1.00 to 1.75 percent!
Traditional “big bank” policy dictates that their mortgage agents be prepared to, at best, discount the posted rate by 0.10 to 0.75 percent. Of course, in order to get a fully discounted rate the bank likes to see your personal investment portfolio.
Why should your net worth have anything to do with the discount you receive? At Mortgage Super Brokers, your discount is based on normal qualifying procedures such as credit worthiness and job stability, not how much money you have.
Super Brokers has access to over 35 lending institutions to find you the best possible mortgage to fit your needs. We do not work with one bank or one institution; we are an independent company with a sole purpose of finding you the best mortgage rate in Canada.
Why make the switch to Super Brokers?
The big difference when using Super Brokers is service! We don’t stop at the application. We assist you in gathering all information that the lender requires. Our national team of brokers can also assist you with picking the right legal representation, residential appraiser, home inspector and mortgage insurance required.
We have the solutions to all of your mortgage related concerns. Unlike the big banks, we work harder to earn your business and to keep you coming back!
If you have any questions concerning your upcoming mortgage renewal, please ask us by filling out our mortgage renewal application.