How to renew your mortgage before the deadline
Most people understand that they will have to renew their mortgage by the end of their mortgage term. But what if you want to renew before the end of your term? Is this possible and how can you do it?
The answer is, yes you can renew early – and in fact, a lot of people do. When you renew your mortgage early, it is called refinancing. Usually, people renew their mortgages early when they have a chance to get a better interest rate or if they are unhappy with their current lender for some reason. When you refinance in order to get a lower interest rate, you can lower your monthly mortgage payments or even end up saving thousands of dollars on your overall interest payments over your amortization period.
So how do you renew your mortgage before the deadline?
The first step is to contact your mortgage broker. Just like when you got your current mortgage, you will have to go through a credit check and approval process.
Your mortgage broker will also help you determine whether or not it is actually worth it for you to renew early. You may be saving on interest payments, but you have to remember that you will likely have to pay a financial penalty because you are breaking your current mortgage early.
Your mortgage broker will run a calculation for you to determine how much you actually save – or lose- by renewing early. The closer you are to your current mortgage deadline, the more you are likely to save by renewing early. By contrast, if your mortgage renewal deadline is still some time away, it may not be worth it for you to renew early.
Reasons people choose to renew their mortgage early
There are many reasons why you might wish to renew your mortgage before the deadline. These include:
- Saving money on interest payments over the amortization period of your mortgage.
- Lowering your monthly or bi-weekly mortgage payments.
- Leaving a lender that you are unhappy with.
- Consolidating higher interest debt (if you have enough home equity, you may be able to consolidate other consumer debt into your mortgage).
Contact 1Onefund Financial today
Are you considering renewing your mortgage before the deadline in order to reduce your payments, save on interest, or consolidate your debt? If so, we can help. Contact us today to speak to one of our brokers.