The Importance of Mortgage Renewal

When your mortgage term ends – usually after 5 years – you will have the option to either renew your mortgage for another term or to pay off your lender entirely. Unless you have very little left owing on your mortgage, however – chances are that you will need to renew. Mortgage renewal is a very important time because the decisions that you make could cost – or save – you thousands of dollars over the lifetime of your mortgage.

What happens at mortgage renewal time?

When your mortgage gets close to its renewal date, you will receive a notification from your lender that your mortgage term is coming to an end. Usually along with this notification will be an offer for a new term at an interest rate determined by the lender.

If you accept your lender’s offer, your mortgage will be renewed for another term and that will be that.

Why you shouldn’t simply accept the offer from your lender:

Even if you like the lender that you are working with, you shouldn’t automatically accept their offer for mortgage renewal. Lenders know that the vast majority of homeowners will simply sign the new offer without comparing rates from anyone else. And this gives them very little incentive to offer you their best rate.

What should you do at mortgage renewal time?

A few months before your mortgage comes up for renewal, you should make an appointment with your mortgage broker. Your mortgage broker will compare lenders and their rates on your behalf to make sure you get the best interest rate possible. And if you really want to stay with your current lender, there is a good chance that your mortgage broker can help you get a better rate with them than they offered in their renewal offer!

Another reason why you need to work with a mortgage broker is to determine whether your mortgage needs have changed. For example, perhaps your current mortgage is a bad credit mortgage but you have been working hard to repair your credit score. You may now qualify for a more traditional mortgage.

Or perhaps your circumstances have changed so that it makes sense for you to switch from a fixed-rate mortgage to a variable rate mortgage – or vice versa. Your mortgage broker can help you to determine which is best for you.

Contact 1Onefund Financial today!

Is your mortgage coming up for renewal? Contact 1Onefund Financial today to set up an appointment with one of our brokers.