What You Need To Know About Mortgage Renewals
In 2024, nearly 2.2 million mortgages will be coming up for renewal. If you are one of those people, it’s important to start thinking about what your next steps are going to be. Always remember, you have options! Here are some things to consider when you’re in the renewal process.
Renewal Date Awareness: Keep track of your mortgage renewal date. Lenders typically send renewal notices a few months before the term expires, but it's essential to be proactive and start exploring options well in advance.
Shop Around: You are not obligated to renew with your current lender. Take the opportunity to shop around and compare mortgage rates and terms from different lenders. This can help you secure a better deal.
Consider a Mortgage Agent: Mortgage agents can help you explore options from various lenders, potentially finding you a more favorable deal. They can also assist in navigating the renewal process.
Explore Refinancing Options: During the mortgage renewal process, consider whether refinancing makes sense for your financial situation. Refinancing involves replacing your existing mortgage with a new one, often to take advantage of lower interest rates, consolidate debt, or access home equity. Assess the potential benefits and costs associated with refinancing before making a decision. Keep in mind that refinancing may come with certain fees, so it's crucial to weigh the long-term savings against upfront expenses.
Negotiation is Possible: Don't hesitate to negotiate the terms of your mortgage renewal. Your financial situation or the market conditions may have changed, and lenders may be willing to adjust rates or terms to keep your business.
Credit Check: Lenders may perform a credit check during the renewal process. Ensure your credit score is in good shape by paying bills on time and managing your debts responsibly.
Review Your Financial Situation: Take the time to assess your current financial situation and goals. Consider factors such as changes in income, expenses, and long-term financial objectives when choosing your renewed mortgage terms.
Fixed vs. Variable Rates: Decide whether you want a fixed or variable interest rate for your renewed mortgage. Each has its pros and cons, and the choice depends on your risk tolerance and market conditions.
Prepayment Privileges: Check if your renewed mortgage will include prepayment privileges. Having the ability to make extra payments or pay off your mortgage early can save you money in the long run.
Penalties for Breaking the Mortgage Term: Understand the penalties associated with breaking your mortgage term early. This is important in case you need to sell your home or make changes to your mortgage before the term is up.
Read the Fine Print: Carefully review all terms and conditions before signing any mortgage renewal documents. Ensure you understand the interest rate, payment schedule, prepayment options, and any fees associated with the renewal.
By being informed and proactive, residents in Ontario can make well-informed decisions when it comes to mortgage renewals and potentially save money in the process.
Book a meeting with me to get start your renewal process today. It’s never too early to start thinking about your next steps and planning for a bright future.
