Five Tips For Renewing Your Mortgage
When it’s mortgage renewal time, many people just simply sign that renewal letter they will get in the mail from their lender. While there’s nothing wrong with that approach, mortgage renewal is a fantastic time to find a better deal, save money and take advantage of mortgage features and products that may be better suited for you.
As a Mortgage Consultant, I am familiar with the mortgage renewal process and can help you determine the right mortgage renewal option for you.
To help you avoid missing out on savings or opportunities when it comes to your next mortgage term, I have outlined five mortgage renewal tips to ensure you’re getting the most out of your mortgage renewal.
Tip #1: Determine your needs for your next mortgage
Before you go ahead and sign on the dotted line for the next five years (typically), it will be in your best interest (pun intended) to assess your current situation and future plans for the coming years.
For example, do you have consumer debt you’re struggling to pay off? If so, it may be worth consolidating it into the mortgage to reduce interest costs and create a more affordable payment.
Do you have plans to purchase a rental property? Then you may want to think about setting up a re-advanceable mortgage or refinancing to pull out equity.
These are just a couple of common themes, but the point is not doing a thorough needs analysis beforehand could lead you to backtrack, which could lead to unnecessary expenses and penalties or, worse yet, entirely remove the option of accomplishing said goal at all once you’ve signed on the paperwork. If you need help assessing your situation or understanding your options, just reach out. We’ll be happy to have a complimentary discussion to assist you.
Tip #2: Start early
When your mortgage is six months away from its maturity date, the date when your mortgage term expires, this is when you should start the process of thinking about your next mortgage term and comparing different options.
I know you’re saying, “Wow, that’s so early!” But think about it this way, when you’re shopping for a new car, do you go the first weekend and buy the first car off the first lot that you see, or do you do some research first and test drive different makes and models a few months in advance before pulling the trigger?
Trust me; you’ll want to give yourself as much time as possible to make an educated decision before committing to the next five years of your life, most often the length your mortgage term will be.
Tip #3: Talk to your current lender
Once you have an idea of what you want to accomplish, you’ll want to start by first speaking with your current mortgage lender to determine if they can help you and what their offering would be from an interest rate standpoint.
Typically, your current mortgage lender will reach out to you three to six months before your term is up for renewal to try and get you to sign on the dotted line early for another five years. This is a bank retention strategy, and although you should get this offer in writing, you should not sign this until you’ve completed the next tip.
Tip #4: Talk to a broker
Once you’ve found out what your options are with the current bank, you’ll want to compare them with a mortgage broker to compare options.
A mortgage broker is a complimentary position, so we can provide a no-cost review to see if there is an opportunity to save you any money or provide a more flexible or direct solution to your goals. Skipping this step could lead to extra interest costs or lead to a less suitable mortgage product for your needs. To get your free mortgage review, click here to reach out to let me know how I can help.
Tip #5: Keep the future in mind
As we’ve mentioned, most mortgages come in the form of five-year terms. However, you can receive a mortgage term anywhere from six months to ten years, and it will be very helpful to determine where you sit in that large spectrum. Your mortgage broker should be able to help you determine which terms you should consider, but here are a couple of questions to ask yourself to help steer you in the right direction:
a. Do you plan to sell or move in the next five years?
b. Do you have any future expenses that you anticipate (wedding, car purchase, home renovations, big travel plans)?
c. Are there any big shifts in your employment expected, such as starting your own business in the coming years?
d. Will you be pulling equity out from your home in a couple of years?
These are just a couple of examples of questions to think about. These answers will help determine what term length and type of interest rate you should look to.
For more mortgage renewal tips in Victoria, BC, reach out to us to have a complimentary discussion about your situation. As a top 10% mortgage broker and credit specialist for Canada’s largest national mortgage brokerage Dominion Lending Centres, I assist my clients to create and implement long-term strategies to assist in achieving their real estate goals. With access to a vast network of major banks, credit unions, trust companies, and alternative lending options, I can ensure the correct solution for unique situations. With access to over a hundred options, including major banks, credit unions, and trust companies, clients can be certain I will fight to negotiate for their best interest. I offer services like first-time home buyer mortgage, mortgage renewal, mortgage refinancing, debt consolidation mortgage, reverse mortgage, second mortgages, private mortgage lending, self-employed mortgage, investment property mortgage, and CHIP reverse mortgages. I provide Mortgage Services to clients across Comox, Vancouver, Campbell River, Victoria, Mill Bay, Cobble Hill, Duncan, Nanaimo, Saanich, Langford, and Sidney, British Columbia.
To learn more about the services I offer, please click here. To get in touch with me, please click here.