Steps to Renewing Your Mortgage
#4 Always Negotiate the Terms
Once you have collected competitive rates and terms, consider negotiating with your existing lender. If they are not offering better terms, evaluate a new lender according to the improvements in the new mortgage agreement, and ensure you receive better terms in the renewed deal regarding the interest rate, repayment schedule, amortization period, and prepayment options.
#3 Check the Market and Get Competitive Rates
This is a good time to explore other lending options. Your goal should be to secure the most favourable terms. For this, you will need a clear idea about current interest rates, different mortgage products, and terms offered by other lenders. Consult with a mortgage broker to simplify this process.
#2 Clearly Understand the Terms of Your Current Mortgage
Read the fine print before you start the renewal process. Carefully assess the current mortgage agreement, including the interest rate, remaining balance, repayment terms, and any applicable fees or penalties you may have to pay if you terminate the mortgage early. This step lets you identify the changes or improvements you want in the renewed mortgage.
#1 Start the Process Before the Current Mortgage Expires
Beginning the renewal process a few months before your current mortgage term expires is vital. This will give you time to study the market, compare offers from different lenders, and negotiate the best terms. The renewal process can be initiated through your lender or mortgage broker.
#5 Ensure All Documentation is Complete
The process of getting a mortgage (or renewing one) is intricate. One area that requires a bit more due diligence is documentation, as lenders will request a lot of paperwork, including proof of income, employment verification, bank statements and other documents that can help lenders determine your financial stability.
#6 Review the New Agreement Carefully
Review the terms and conditions of the new agreement. Check the interest rate and payment schedule and ensure they align with your goals. If you need help understanding something, seek clarification from an industry professional. Ultimately, you should only sign the mortgage renewal agreement if you are happy with the terms or have no better option.
