Ten Tips For Getting The Best Deal On Your Mortgage Renewal
Least possible resistance? - Don’t just take the easy way and renew your mortgage without giving it a thought. This could cost you money - and possibly a lot of money. Review your financial situation, the property, and the current state of the mortgage market.
When should I start thinking about mortgage renewal? - Each renewal date is an opportunity for a fresh financial assessment. Be sure to speak to your mortgage broker about this, three to six months in advance. Don’t wait passively for renewal notices and marketing calls. Be proactive.
Is my credit ok? - There is a lot of mystery around credit reports. The credit reporting agencies are currently making major changes to reporting procedures, ostensibly in response to privacy regulations. You never want to be surprised by what the financial world is saying about your finances.
You ought to check your own credit periodically. This will ensure correct reports and helps prevent fraud against you. You can visit equifax.ca and transunion.ca for more information on how to check your credit.
4. How do I maintain good credit? - Careless disputes with cell phone companies, forgotten or mistaken accounts, overuse of credit cards, and frequent credit-seeking may affect your credit and cost you your renewal and/or the best rates and terms, amounting to thousands of dollars. Better to pay or settle that old $26 bill well in advance.
5. What paperwork do I need? - Assume that you will be applying for a new mortgage - especially in the Covid-19 era. Lenders are being very cautious. They may want job and income information right up until days before the mortgage completion/renewal date. As well, be sure that the property is in good condition. An often-overlooked condition of renewal is that the property has maintained or increased its value.
6. How do I prepare? - If you wait until the last minute or do not put your mortgage broker to work ensuring that your renewal is the best deal, you may end up paying much more than you should.
Well in advance, speak to your mortgage broker. They should review details with you: prepayment privileges, penalties, portability, renewal rates and conditions, standard or collateral charge, and other things that should bore you to tears.
7. What if I want to quit my job? - You may be living an exciting life filled with travel and adventure. I envy you and so will your mortgage lender’s underwriters who slave away under gruelling conditions, harsh deadlines, and endless pressures. But we want to know that month in and month out, you will be able to make those same boring payments. Your tax information, bank statements, and employer letters tell the story for you. Make sure documents offer comfort and reassurance to people who lend you money.
8. Is my life going to change? - As above, a coming mortgage renewal date is an excellent time for an overall financial assessment. Don’t let a financial institution be the judge of you. Are you tapering off on your work and income? Is the property aging and in need of substantial repairs? Should you move to a bigger place in the next few years? Is your life in transition? These considerations should affect your thinking about your mortgage. A professional mortgage broker will review these questions with you.
9. What do lenders want? - They want a valuable property backing their loan, a customer who will be able to pay for the coming term of the mortgage and beyond, and a happy, no-fuss (low-cost) customer.
10. What’s next? - Have your mortgage broker shop for you and negotiate your rate and terms, prior to signing your renewal letter. There may be a better deal out there. The lenders love to rob each other, and you will be the prize.