What you probably don’t know about mortgage renewals
When you sign up for a mortgage, you sign up for a specific length of time – or “term”, after which you will either have to pay off your home or renew. Usually, homeowners will have to renew their mortgages several times before they finally are able to pay their home off in full.
But chances are, even if you have been a homeowner for some time, there are a few things you may not know about your mortgage renewal. And in this article, we will uncover a few of those things.
How a mortgage renewal works
In most cases, when your mortgage nears its renewal date, you will be sent a notice from your lender letting you know that your term is about to expire. This notice will generally include a renewal offer which – if you sign and send it back to the lender – will renew your mortgage at their offered rate.
Here is what you need to know:
Their offer is probably not their best offer.
Lenders know that most homeowners will not take the time to look for better rates. Because of this, they have very little incentive to offer you their best rate. Simply by contacting your lender and asking if they can do any better, you may be able to get a more favorable rate.
You don’t necessarily have to stay with your current lender.
Just because you have a renewal offer from your current lender, it doesn’t mean that you have to stay with them. In fact, you should always shop around at mortgage renewal time as you may be able to get better rates or new terms that better fit your lifestyle today. And the best way to shop around for a mortgage renewal is to work with a broker like 1Onefund Financial who has connections with dozens of reputable lenders.
It’s a good time to recalibrate your budget.
Mortgage renewal time is an excellent time to look at your finances and budget and see if your current type of mortgage meets your needs. If your income fluctuates, for example, you might consider getting a variable rate mortgage. If you have gotten a promotion recently and are making more money, you may wish to shorten your amortization period in order to pay off your mortgage sooner. Talk to your mortgage broker to see what is right for you.
Contact 1Onefund Financial today
Is your mortgage up for renewal? Don’t sign your renewal offer without talking to us first. Contact us today to speak with one of our agents.