Did you get your Mortgage Renewal?
Don't sign just yet....
The majority of home owners don't shop around for a more affordable mortgage rate when it comes time to renew their mortgage.
When it comes time to sign back your mortgage renewal, don't simply agree to whatever the first rate is you're offered, this is the perfect opportunity to refinance your mortgage payments, take advantage of competitive rates, and to save money on your mortgage.
Know Your Mortgage Renewal Options
Often, when it comes time to renew your mortgage, you'll receive a mortgage renewal offer from your current lender. As soon as you do, begin researching current mortgage rates and terms, and compare them to the offer you were given. An important thing to remember is; if you find a better mortgage rate or option, you can always move your mortgage business to a different lender.
This process will occur during what is called the "mortgage renewal period." During this period, you're free to change your lender, or move your mortgage, without penalty. Penalties typically only occur when you break your mortgage term early.
Don't forget however, that the mortgage rules and laws differ from province to province, so it's important to be aware of the mortgage renewal process, and any associated legalities. If this seems like a daunting task, it may be beneficial for you to contact a professional mortgage broker who will work on your behalf and assure you follow all guidelines while renewing your mortgage.
Think Things Through
Don't jump at the first mortgage renewal deal that is put in front of you. Most mortgage lenders count on the fact that you won't inquire about lower mortgage renewal rates, and will simply sign back at the same rate you previously agreed to, or a new, higher rate they're offering.
If you want someone to work on your behalf, acquiring the services of a Licensed Mortgage Broker might be beneficial as mortgage brokers have instant access to numerous lenders and can easily compare rates and make personal recommendations to fit your financial needs.
Is There A Cost To Switch Mortgage Lenders?
There may be costs associated with switching mortgage lenders, especially if you are not using the services of a mortgage broker:
- Appraisal Fee: Before finalizing a new mortgage agreement, the lender will want to know the current market value of your home, which means you'll need a home appraisal, which typically costs between $150 and $300.
- Discharge Statement Fee: If you decide to switch lenders at the end of your mortgage renewal term, most lenders charge a discharge fee, which typically ranges between $150 and $300.
- Legal Fees: Since a new mortgage is being registered, you'll require legal council to draw up the appropriate papers, which could cost upwards of $600 to $1,500, depending on your lawyer.
Remember, although you are paying fees, you still have the opportunity to save more than you spend by finding a better mortgage rate at the time of your mortgage renewal. As well, many lenders will cover a portion or all of these fees in order to secure your mortgage business.
Take the time to compare rates; contact a mortgage broker for help, and you could potentially save thousands of dollars in interest alone as you work toward paying off your mortgage.