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  • Writer's pictureLendX Financial

Mortgage Renewal: Four Things You Need To Know

If you are due for a mortgage renewal a thousand thoughts run through your mind: what, how, when, who, where are the major questions that need clarity. We try to cover some of these below. The Process: If you're wondering what the process of mortgage renewal entails, it typically starts with the lenders sending you the renewal statement. If you are expecting a renewal statement you need to start thinking if you want to continue your existing mortgage with the current lender, or if you want to negotiate for better terms, or if you want to switch to a different lender altogether. The last two options have the potential of saving you some money but require some work such as redrawing the contract after negotiations or looking for a new lender etc. The Time: You may wonder how early you can renew the mortgage? As per law your lender should give you a notice of minimum 21 days notice when your mortgage is due for renewal. But what you actually need to do is to plan ahead before receiving this notice in case you want to look for a better mortgage option for yourself. So in what cases is it ideal to get the mortgage renewed early? It is when you get a mortgage at a rate which expires before your mortgage is due. Being in such a situation would mean you would have to pay a penalty for breaking the contract earlier than agreed upon, but you do stand to gain with a lower rate and more favourable terms with the new lender. The Rate: Finding the lowest mortgage rate is just like shopping for the best deal when you are in the market. You need to look at several options or in this case several lenders and the terms they are offering along with the rate. If you have a mortgage broker for help this process of finding the best rate and terms becomes a lot easier as they help you find the right fit for you within their professional network of lenders. Going with a mortgage broker will probably fetch you a better rate than what you'd get if you approach the lender independently. Other factors: While shopping around for a mortgage you need to not only consider a low mortgage rate but some other factors as well. You need to see if the mortgage rate is fixed or variable; if the payment schedule is something you are comfortable with etc. You would also need to see how the amortization period affects your mortgage. If you had a variable rate mortgage when you got the home and feel a fixed rate mortgage will save you more, you may consider making that switch at the time of renewal. Whatever you do, make sure you read between the lines before signing that mortgage renewal contract. If your mortgage is due for renewal and if you have any questions or concerns do reach out to LendX Financial in Brampton, Greater Toronto Area.

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