What are my options at renewal

Category: Blogs,Mortgage Tips & Advice

What are my options at renewal? 

This question is top of mind for many people these days; with over 60% of all mortgages coming up for renewal over the next three years, this topic is timely. 

With over 60% of all mortgages coming up for renewal over the next three years, this topic is timely. 

At renewal or maturity date of your current term, you typically have three options.

1. Stay with the existing lender 
2. Refinance 
3. Switch lenders (saved the best for last)

Let me explain your options and why you would consider one over the other.

1. Stay with the current lender.

There are a few reasons to stay with your current lender. 

• After we have reviewed your existing lender’s offer for renewal, if the rate you are offered is a lower rate and the options are better suited for you, we will recommend that you stay with your existing lender on renewal. 
• Suppose you have an interruption in income due to job loss. In that case, qualifying for a new mortgage may be difficult, and this is when we suggest you take on a short-term mortgage with your existing lender to give yourself time.

There is really no other reason to stay with your current lender. Remember, your first move is to contact us and review your options before you blindly accept your renewal. 

Information you need to know:

• There is no fee to stay with the current lender (excluding alternate lenders and private mortgages who often have renewal fees)
• Typically, you will get your offer about one to three months before your renewal date (that’s when you call us if we have yet to speak) 

    2. Refinance

Refinancing can be done at any time. However, many people choose to do this at renewal time as there is no penalty at renewal when you make changes. 

With a refinance, you can;

• • Increase your mortgage amount (borrow from your equity) from paying down high-interest debt, buying a new car, renovating your home, paying for university, access funds for downpayment to purchase a cottage, the use of the equity is up to you.
  • Change your amortization to a longer or shorter period, customarily done to reduce the monthly payment.
  • Add or remove someone from the title;
  • Basically, you can make any changes to the new term contract. It should go without saying, but here we go – obviously, the rate on the new term will be different from your current rate. 

Information you need to know:

• • Fees may include legal fees, approx $600-800, appraisal, approx $400-500, and discharge fee from the current lender, approx $400. 
  • There are lender programs that cover most of these costs, but you know me; I want you to know this all upfront and be able to plan. We can add these fees to the mortgage, so you don’t need to have them in hand if that’s a concern.

   3. Switch lender

I saved the best for last! If you are not making any changes to your mortgage but are looking for the best rates and options, this is for you. 

• A switch allows you to move from lender A to lender B seamlessly. 
• There is no fee to switch from one lender to another. 
• We would only switch for better rates and better options. 
• Hint: There are ways to use this options instead of refinancing if you currently have a home equity line on your current mortgage. If this is you, let’s talk, and we can work some magic. 

Information you need to know:

• Fees are paid by lender B (new lender). However, you may still have a discharge fee from the current lender. 

Now you know that you have options at renewal, and that’s the most significant part for most people: knowing there are options. 

If your mortgage is up for renewal in the coming 1-3 years, let’s meet and review your plan to pay down your mortgage while you still have a lower rate and plan for your renewal. Click here to book a time. 

Talk soon, 

Ana

Mortgages can be complicated; we are here to help you make “cents” of it.

We focus on Mortgage Solutions, Period!

To learn more connect with Ana Cruz 905.870.0513 or email at ana@askanacruz.ca