How to Take Advantage of a Mortgage Renewal
Getting a mortgage approved and reaching the end of its term is just one phase of your home loan journey. As long as you owe a balance at the end of your mortgage term, you will need to renew your agreement for another term. If you don’t renew, the mortgage holder (lender) can demand the balance amount in full from you.
Should you not want to renew the term with the current mortgage holder, your other option is to transfer your mortgage to a different lender. This gives you the opportunity to speak with other lenders and take advantage of better rates or change the repayment conditions.
Most borrowers renew their mortgage with their existing bank because they don’t know there are better options available. Which means you could be losing out on lower interest rates and better terms by sticking to the same mortgage holder till you pay off your mortgage entirely.
How to take advantage of mortgage transfers during renewals.
On your mortgage renewal date, you can renew or transfer your current mortgage to a new lender for a better mortgage rate at no cost to you. Your current bank will often not offer you the most competitive mortgage rate options at renewal. On the other hand, a broker can help you to understand all your options and secure a better mortgage rate than your bank is offering, and it won’t cost you anything.
To transfer your mortgage, your current mortgage term must be up for renewal. I suggest contacting your broker approximately six months before your renewal date to talk about mortgage rate options. You are required to re-qualify when you are transferring your mortgage. For this, some paperwork will be required. It is also an excellent time to talk to your broker about mortgage interest rate conditions and your plans for the future, for example, selling your home or upgrading is your plan.
If you don’t think you will qualify to renew your mortgage with your current lender (because your income has changed or because you had some setback that affected your credit), you should still speak with your broker about your plans so they can help put you back on the right track. They may even be able to help you negotiate a better rate with your current mortgage lender. Also, renewal is a good time to talk to your mortgage broker about the possibility of refinancing or taking equity out of your home to pay off other consumer debt.
Mortgage borrowers who want to save money in interest at mortgage renewal should contact their mortgage broker. There is money to be saved by asking questions, and there are no costs to transfer your mortgage at renewal.
To learn more about mortgage renewals or transfers, reach out to Connie Graham. I am a top mortgage broker in Edmonton, Sherwood Park, Alberta with Axiom Mortgage Solutions Inc. My goal is to make your life more comfortable throughout your home ownership journey. Regardless of how life turns out, I make sure you always have a plan and the best mortgage to fit your present needs.