Whether your mortgage is in Port Elgin, Kincardine or Ottawa, use your mortgage renewal date as an opportunity.  Explore your mortgage options.  Ensure that you are still on track with your personal goals.

At renewal, you have two primary choices to stay with your current lender – or to switch to a different lender.

When you stay with your current lender,

you should talk to your mortgage broker first to understand what type of rates exist in the market.  Next, you will talk with your current lender.  With your knowledge of market rates, if you wish to stay with that lender, then remind them that you have been a customer for several years.  Let them know you would prefer to stay with them, and ask them what is the best rate and term they can offer.  If it’s competitive with the market and you are fine with the lender, then you’ll sign a piece of paper and be all done.

In short, staying with the current lender involves a couple phone calls and a signature to complete.

You can also choose to switch to a different lender.

This is a little like re-applying for a mortgage again as the new lender needs to qualify you.  In this case, you should contact your mortgage broker.  They will need to update your application information and can advise what options exist for you at that time.  When together you select the new lender, term and rate, then the switch application will be submitted.  Within a couple days, the switch approval should come through.  It will be conditional on providing employment letters, paystubs and some of the original mortgage documentation.  You can plan on meeting to sign some documents.  Finally, a week before the renewal date, someone from the lender will visit your home to view ID and get a few final signatures.

Point being, changing lenders is almost re-applying and requires you to invest some time.  Your current lender will also charge you a Discharge Fee of approx $350 to cover the administration of removing you from their system and dealing with the switch.  This is the same fee lenders charge you after your final payment – when the mortgage has been paid in full – kind of a ‘final insult to injury’ charge.

When choosing between the two options then, it needs to make financial sense to make the switch.  A good Port Elgin mortgage broker should be able to put that into dollars and cents within a few minutes for you.

In some cases, a homeowner will be so dissatisfied with their current mortgage lender, that they will switch lenders even without a financial benefit.  No problem.  We’ll just go through the steps to make that happen seamlessly.

A couple of things to note:

If your lender registered a collateral mortgage on title when you got your mortgage financing, then it will cost you approx $1000 in legal fees to get out of your current lender – to cancel the lender-specific collateral mortgage – and to put new mortgage security in place.  Lenders like TD, Tangerine and National Bank only use collateral mortgage security.  Similarly, the Scotia STEP mortgage, the RBC Homeplan are also examples where collateral mortgage security is used.

If you want to increase your mortgage to payoff other debts – to refinance your mortgage -it’s a whole new application process anyways.  The reason you might do it at renewal is to avoid any prepayment penalties.

Start the Process 4-5 Months Before Renewal

We can get an interest rate commitment as early as 120 days before renewal if you are switching or refinancing.  It always makes sense to get the approval and interest rate commitment as early as possible to protect yourself against interest rate increases.  If the rates drop, you can always get the lower rate but it makes sense to protect yourself where you can.  A small interest rate change can mean big $$.

Summary:

Never sign a renewal agreement from your lender until you explore your options and understand what is available in the market.  Speak with someone that can outline whether a switch is of any financial benefit.  Take advantage of the renewal date to adjust your plan – to make the mortgage fit your goals.

For all your mortgage needs, contact a Port Elgin mortgage broker, such as myself, today.

Book a 15 minute Discovery Call with us at chatwithjim.ca to discuss renewal options.