A huge chunk of the combined income of a Canadian household goes towards making mortgage payments. Even if you’ve allocated a budget for mortgage payment, but won’t be able to fulfill your obligation to the lender, you’ll be increasing an outstanding loan, so an application for a mortgage renewal might be looming in the future.
In simple terms if you keep up-to-date with making your mortgage payments, the lender will usually renew your mortgage.
One important thing to remember is that a mortgage renewal application doesn’t get approved all the time. If you meet the lender’s criteria, you have a high chance of being approved. However, these same requirements could also hinder you from being approved for a mortgage renewal. You should always apply due diligence and make sure you’re able to cover all the documents and processes necessary for approval.
Tips on renewing your mortgage
Here are a couple of tips that can help you get favorable results:
There’s nothing wrong with getting ready early. Preparing early will give you enough time to make a sound decision. Start shopping around for a good rate within four to six months before you’ve reached the maturity of the mortgage.
Also make sure to check your preferred financial institution’s website to get the necessary information. It’s also recommended to consult with your mortgage broker and get professional help.
Do your due diligence
Before considering renewing your mortgage with your current lender, do your homework!
Consult with your mortgage broker since they’re your best bet to provide you a clear path and have your best interests at heart. Almost 27% of Canadian households automatically sign with their current lender. Though it might seem convenient, in the long run it’s not the wisest thing without seeing if there are better offers out there that would be favourable to you. Remember, the goal is to make it easier for you to fully pay off debt. Do your homework before your renewal is due.
Don’t always accept published rates
Never accept published rates right away. If you think that your current lender has the best rate, best term and best policy, then seek confirmation from your broker.
Remember that banks and lenders are businesses and at the end of the day, businesses are meant to earn profits. Reality is that they’re earning profits from the interest paid by borrowers. But there are still other institutions that may be more suitable for your needs.
Look for the best option
Don’t just accept what your lender is offering you. It may not be the best product with the best option for your situation.
Negotiate for better rates, better terms and better amortization schedules. Remember, you’re applying for a mortgage renewal to pay off the outstanding balance on your mortgage. Don’t just accept whatever they’re offering, nor do you want to enter into a contract that’ll not be beneficial for you.
Changing lenders for a better deal
Changing your lender may be a good option if you’d like to get a better deal for your mortgage renewal. Your lender’s offer isn’t always the best offer, that’s why we recommend you seek guidance from your mortgage broker.
Remember, sometimes there’s no penalty for switching to a different lender if you do it at an appropriate time. Be sure that you have all relevant information and documentation on hand.
Consulting a mortgage broker will save you time. They’ll submit the paperwork and negotiate on your behalf. The Bank of Canada attests that an individual who uses the services of a mortgage broker is likely to pay less as compared to individuals who didn’t. Indeed, using a broker could definitely save you time, money and minimize stress.
Want to have the best deal for your upcoming Mortgage Renewal?
After it’s all said and done, it’s crucial to get help from a reliable broker. Take note that there are fraudsters who take advantage and prey on buyers and loan seekers who aren’t informed. Make sure that you work with a mortgage broker who’s not only capable, but trustworthy as well.
Daisy Raouph is a Mortgage Broker and Financial Security Advisor with over 30 years of financial experience under her belt. When deciding which deal is best for you, Daisy Raouph, with her group of experienced professionals can provide guidance with choosing the best option. Her team deals with numerous lenders and financial institutions, working alongside you, achieving your goals.