If you have a mortgage, chances are unless you win a lottery (cha-ching $$$) you’ll be doing a mortgage renewal when your current term has finished.
While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.
So what is a mortgage renewal?
Mortgages are amortized* over a set term* which can vary from 1-10 years.
About 6 months before the end of your term, your current lender will suddenly become your “Best Friend” showering you with attention and trying to entice you with early renewal offers… Please, please, please Mortgage borrower, sign here on the dotted line to renew… it’s sooo easy!!
You have 3 options
Sign and send back as is (don’t do it, really I mean it… don’t do it!!)
Check the market to make sure you are getting the best rate and renegotiate with your current lender
Talk to a Dominion Lending Centres Mortgage Expert and together we can discuss the best options available for your situation.
Lenders know that 80% of people will sign their renewal forms, because it’s easy. Banks & Lenders are a business and as such they want to make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get. Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home?
Yes, signing the renewal document is easy, however, it’s in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket… so its time to get to work!
5 steps to save you money on your mortgage renewal
Receive the renewal offer from your current mortgage lender and examine immediately, which gives you enough time to make an informed decision.
Do your research via the internet and phone calls to find out about current rates.
Phone your current lender and negotiate!
If your lender will not offer you a better rate then it’s time to move your mortgage. YES, you will have to complete a mortgage application and gather documentation, just like you did for your original mortgage.
Take a look at your budget and see if you can increase the amount of your mortgage payments above the mandatory payments and save money by paying off your mortgage quicker.
Your mortgage is one of your biggest expenses. For this reason, it is imperative to find the best interest rates and mortgage terms you possibly can.
As you can tell there is lots to discuss about mortgage renewals.