Mortgage Renewal
At the end of your mortgage term, as long as you still have a balance owing, you will be required to renew your mortgage. The good news is that with every mortgage renewal comes the possibility to assess your current one and consider any new financial goals you may have.
Before agreeing to the terms and signing the documents consider the following
- Shop around for a better mortgage product
- Review your financial goals. How have they or will they change in the near future that can impact your mortgage needs
- Consider if the current mortgage payments fit your needs
- If you are thinking about selling your property or have renovations and home improvement projects coming up
- If you just need access to some cash to pay off debt or use for investment
- Evaluate the costs involved with moving your mortgage to another provider and what the fees are if any
What is the benefit of an early renewal option?
Once you have done your research and considered all your options and are ready to renew your mortgage contact me! I work closely with my clients from the start to create a personal financial profile to monitor and evaluate your future options as well as current ones. Connect with me to review options available for your mortgage renewal!
If your mortgage loan is considered a fixed term you will only be permitted to break the term by paying a penalty. The early renewal option is a great feature as it allows you the freedom to renew your mortgage earlier than the maturity date with the same lower interest rate you have on the mortgage loan in the times when the interest rates might be on the rise.
Frequently asked questions
Will my mortgage automatically renew?
Your renewal statement will say if your mortgage will be automatically renewed. Some lenders might have automatic renewals, which means that if you do nothing, your mortgage will automatically be renewed. Automatic renewals mean that you agree to the terms and rates that your lender offers, which might not always be the best.
Can you be denied a mortgage renewal?
Yes, you can be turned down for a mortgage renewal because they are not always granted. About 5% of requests to renew mortgages are turned down. Your mortgage lender might decide not to renew your loan for a number of reasons, such as if you missed mortgage payments on your last loan, lost your job, or now have a much lower credit score.
When I renew my mortgage, do I have to do a stress test?
No, If you are renewing your mortgage with the same lender, you will not be subject to a mortgage stress test. The only time the stress test is performed is during the mortgage application process.
Do I need to requalify for my mortgage at renewal time?
At the time of renewal, no more qualification is needed. Re-qualification is not required if you are renewing your mortgage with the same lender.
What’s the difference between renewal and refinance?
When you renew your mortgage, you extend your relationship with your present mortgage lender. You may discuss a new interest rate and repayment plan without starting the application process from scratch. To refinance is to pay off an existing mortgage in order to get into a new mortgage loan arrangement. The most common motivations for doing so are to get access to home equity or to reduce the cost of borrowing money. Prepayment fees might apply if you refinance before the loan's scheduled maturity date.
What if I wait until the last minute to renew?
Mortgage renewals aren't always convenient, especially for homeowners who are already swamped. Your mortgage may be automatically renewed into an open term for an additional year if you do not renew it before its expiration date. The interest rate for this term is often higher than our fixed rate alternatives. Renewing before that time may be in your best interest.
