Preparing for Mortgage Renewal: Consider Your Options

According to federal law, if your lender is a federally regulated institution they must provide you with a renewal statement at least three weeks prior to the end of your mortgage term. This gives homeowners almost a month to decide whether to renew, refinance, or even apply for a HELOC. To get the most out of this transitionary period, it’s best to be as prepared as possible. Here are some tips to get you started.

Reassess Your Goals

It’s unrealistic to assume that you are in the same place financially you were five years ago. Can you pay more towards your mortgage each month or do you need extra cash for tuition or renovations? This is the perfect time for you to determine what your goals are and how best to achieve them.

Explore the Market

Shopping around for a lower rate isn’t like browsing for shoes online, you’ve got to call around or work with a mortgage broker to find out what is out there. Unsurprisingly, the lower the rate, the less expensive your mortgage. That’s a benefit that anyone, regardless of their financial goals, can benefit from. When you find a great rate, ensure to get a rate hold. This is an agreement between you and your potential lender that they will hold that particular rate for you for a predetermined amount of time.

Tweak the Details

Mortgages can be highly customizable, so see what else a lender can do for you. In some cases, switching from a variable to a fixed-rate or vice versa can end up saving you thousands in the long run. If it is important to you to pay off your mortgage sooner rather than later, consider shortening your amortization period or taking advantage of a lender with prepayment options. Alternatively, if you want lower monthly payments, check to see if you can lengthen your amortization.

Your mortgage renewal period is the perfect opportunity to reset your finances in a direction that will fulfill your goals. As soon as you know your mortgage is up for renewal, start researching better rates, lenders, and options. At Source Mortgage Calgary, we can help you do just that! Contact us today to get started.