While most Canadians spend a lot of time and effort on shopping for their initial mortgage, the same is generally not the case when looking at their mortgage renewal. By not reviewing all of their options come renewal time, Canadians cost themselves thousands of dollars each year. Over 50% of borrowers simply sign their renewal letter that is offered to them and send it back to their existing lender, without ever shopping around to ensure they are receiving the most favorable interest rate and mortgage product. Most people spend more time comparing shoes before buying than they do reviewing their largest investment!
Homeowners should never accept the first renewal letter from their existing lender without any negotiation. Simply by signing the renewal letter and accepting the market rate on a mortgage renewal, it could cost a homeowner a considerable amount of money on their next term. This is a great time to assess what your next 5 or 10 year life plan may look like, and to help in deciding whether you are in the right type of mortgage with the right terms. Most clients have shared with me that they have felt overwhelmed with their renewal, or how they have just trusted that their current lender would treat them fairly. This is where I come in, I will review what you have been offered and compare this against all the current mortgage products and terms that are available to you, I can explain the pros and cons of every option, helping you decide on the best course of action for your specific situation.
If you are planning to keep the same mortgage amount and the same length of amortization, switching to a new lender is free for standard mortgages. The new lender will pick up the legal fees for you as they want your business. If you require additional funds on the mortgage, or if you wish to stretch the amortization back to lower payments, this is classified as a refinance and there would be normal legal fees required, we may also require an appraisal on the property (For more information on a refinance please click here). You would need to qualify with the new lender as you will be a new client for them, but not to worry, I will handle all of the paperwork to make things fast and smooth!
In general, it is a good idea to start shopping for a new mortgage between four and six months before your current mortgage term expires. I currently reach out to all of my existing clients six months before their mortgage maturity date to talk over any future plans and life changes, I can then lock in a new mortgage rate for up to four months while we figure out the best solution. Most lenders will wait and send out your renewal letter very close to the expiry date of your current mortgage term, they know this will not give you enough time to research and apply for a new mortgage through a different lender.
The earlier we can figure out what the ideal situation is for you, the more opportunity it gives me to research mortgage products and secure the lowest interest rate possible while we wait for your closing date. I am always watching the mortgage market for you right up until you close to ensure you have the very best mortgage for your new term.
Your mortgage is one of your biggest expenses in life, let me make sure you are not paying more than you need to. I am here to help you from the first call all the way to the conveyancing and closing of your mortgage, I will ensure your mortgage renewal is a smooth and happy one!
Please reach out today for your free consultation, or get started on a secure mortgage application with the click of a button.
Let’s get you one step closer to saving money each month!