Navigating Your Mortgage Renewal. Why The Choice At Renewal Is Not A One Size Fits All Decision. These Are Key Questions To Ask Yourself Before Completing Your Renewal
Renewing your mortgage can be an overwhelming experience, especially if you are unsure of what to expect. With so many options available, it can be difficult to know which one is the best fit for you. Making the right decision when it comes to renewing your mortgage can save you a considerable amount of money in the long run. To explain this in more detail, Keith Uthe Demystifying Mortgages has prepared a list of five questions to ask yourself before completing your renewal.
1. What is a mortgage renewal?
A mortgage renewal is a process where you re-negotiate the terms of your mortgage with your lender. When your mortgage term is up, you will be given the option to renew your mortgage for another term. The new term will come with a new interest rate, payment schedule, and payment amount.
2. Why is renewal not a one size fits all decision?
Every homeowner’s financial situation is unique. Depending on your financial goals, life circumstances, and risk tolerance, the decision to renew your mortgage can be different from someone else’s. For example, if the homeowner plans to sell their property soon, a shorter term may be preferred, while those planning to renovate may choose a longer term. Refinancing during renewal may also be suitable for those planning to buy a new home and keep their current property as a rental, providing access to funds for a down payment while generating rental income.
3. What are the key questions to ask yourself before renewing?
Before you renew your mortgage, there are several questions you should ask yourself. These questions can help you make an informed decision that aligns with your financial goals. Some of these questions include: What is my current financial situation? What are my long-term financial goals? What is my risk tolerance? What is my mortgage payment history? What are the current interest rates?
4. Should you shop around for better rates?
When renewing your mortgage, it is important to shop around for better rates and not feel obliged to stay with your current lender. Comparing rates and terms from other lenders can help you find a mortgage that works better for you, and even a small difference in interest rates can have a significant impact on your monthly payments and the total amount paid over the life of your mortgage. While switching lenders may require requalification, the potential savings from a lower interest rate may be worth the extra effort.
5. When should you start thinking about renewing your mortgage?
It is essential to start thinking about renewing your mortgage several months before your current term expires. Starting the process early can give you enough time to shop around for better rates and negotiate with your lender. Waiting until the last minute can limit your options and put you under pressure to accept the first offer that comes your way. By starting early, you can make a well-informed decision that will benefit you in the long run.
If you’re looking for a mortgage broker, consider reaching out to Keith Uthe Demystifying Mortgages. Unlike the bank, I represent you the client to many different lenders to find you the best terms for your mortgage and make sure you understand what those terms mean. This should be as important as the rate when making your borrowing decision. As a home buyer, this is the single largest investment and borrowing decision you will make at any one time and you should have someone independent of the lender in your corner looking out for you. This is why you need to be considering more than just the mortgage rate ensuring your mortgage offers you flexibility and freedom at minimal cost for those unexpected moments that happen in life.
Whether you are a First-Time Home Buyer, Buying your next home or seeking to Refinance our Calgary Mortgage Broker has many Mortgage Solutions to consider. Serving clients across Calgary, Red Deer, Lethbridge, Edmonton, and Medicine Hat in Alberta.