Mortgage renewal process is one of the most challenging concepts that many Canadians face in their journey to financial freedom. Different financial institutions/brokers lend mortgages at various rates depending on the mortgage type and repayment period. Have you taken a mortgage that is coming due for renewal? Then the following tips will help you make an informed decision when renewing your mortgage thus, saving you money.
Avoid last minute rush
Do not wait until your last month of renewal so that you can shop for a better rate. This is a major mistake that most Canadians make, and they end up signing for higher rates. You should always consider researching for different rates offered by various mortgage providers, at least, four months before your mortgage renewal. This will give you a platform of renewing your mortgage with discounted rates.
Always negotiate on the bank’s posted mortgage rates
After you receive your bank mortgage renewal notice, consider negotiating a lower rate with your lender. There is always room for discounted rates for customers who seek for lower rates. Therefore, take advantage of negotiating a better rate once you receive the renewal notice. Find out what rates other competitors are offering in the market and this will give a better bargaining power.
Always ask for other new mortgages and terms that can work for you
Before you renew your current mortgage, take time and review the newly introduced mortgages in the market and their distinctive features. Who knows? You may be surprised to find new mortgages products that are offering attractive better rates. Other services that you may enjoy include improved pre-payment options, amortization period, accelerated disbursement schedules and cash backs among others.
Conduct a mortgage market research
Doing mortgage market research before your renewal will help you find out the different rates offered by other lenders in the market. Carrying out due diligence from various sources will provide you with more insights to better understand the Canadian mortgage market.
Never overlook the terms and conditions of different mortgages offered by different lenders as this will have adverse effects on your repayment process.
You can switch to a different mortgage product or a different lender at will
The rule of the game is that your relationship with your mortgage provider ends at the maturity of your mortgage period. Depending with your previous engagement with your mortgage provider, you will have the option to either renew the existing mortgage product with the current lender or sign up for a new, different product either with the same lender or a different provider.
You should compare different lenders and providers regarding their rates, products and features. Always ensure that the switch is worth, and it’s going to work for you.
Mortgage renewal period is the best time to refinance
During your mortgage renewal, you will have the opportunity to refinance. At this stage, the mortgage lender sets no limits on the principal amount that you can renew your mortgage. Therefore, you will have the advantage of paying lower interest and amortization costs thus, saving most of your money.
Stop worrying and work with a professional mortgage broker
A mortgage broker can add a ton of value by taking away the pain of researching and shopping around. They have access to rates from all banks and lenders and can arrange a competitive renewal at zero cost to you (if you’re financial circumstances are the same). If you have taken on more debt and have lower credit score – your original lender may not renew your mortgage, or give you very high mortgage rates. This is where a mortgage broker can really shine. A good broker will pull all the stops to make sure that your renewal is on favorable terms.