If you have a mortgage, a mortgage renewal is more than likely inevitable as something you will face, unless you have the ability to pay the balance in full when the term matures. Let me help you understand the important things to consider in preparation.
What Is A Mortgage Renewal? Starting with the basics - the short and sweet answer - a mortgage renewal is when you renew your existing mortgage agreement with your current mortgage provider when its term comes up for maturity.
How A Mortgage Renewal Works:
When your mortgage term is coming to an end, all federally regulated lenders are required to provide you with a renewal notice at least three weeks before your term ends. Yes, this is a tight timeline. Most lenders will reach out anywhere between three and six months before your renewal is due, and you could best serve yourself by creating a reminder in your calendar ahead of time too.
Put simply, when you sign for a new term, you are pretty much signing a new mortgage contract. Pay attention to changes in the terms of your mortgage contract. For example, interest rates have risen, your payments may have changed and there may be new mortgage options available that weren't at the inception of your last term.
Common Mortgage Renewal Questions:
Do you have to renew early? No, you do not have to renew your mortgage early. Each circumstance is unique and some clients benefit from renewing prior to their renewal, reach out if you'd like to know what's best for you.
Can you pay off your mortgage at renewal time? Yes, you can discharge your mortgage (pay it off in full) as an alternative to renewing a new term. You must be very careful on the specific timing of this move to avoid any prepayment penalties, discuss in detail with your lender.
Do I have to renew with my current lender? The short answer is no, but keep in mind if you want to switch lenders, you will have to re-qualify for a mortgage, as it is considered a new mortgage, with a new lender. If you start early and do your shopping around, there might be an option to switch or transfer your mortgage to another lender at renewal time to gain yourself the benefits of a better rate or more desirable loan terms.
Will my mortgage renew automatically? If you do not take any action, then in most cases, yes, your mortgage will renew at the proposed rate and terms set out in your renewal letter from your lender. It is highly recommended that you actively participate in your mortgage renewal process to ensure you get the best possible mortgage product for you and your financial goals.
I would be more than happy to review your mortgage renewal and ensure you are getting the best terms available to you. Reach out today and let’s get started early!
Chad Eliason⠀⠀⠀⠀⠀⠀⠀
250.804.9874⠀⠀⠀⠀⠀⠀⠀
Comentários