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Is your mortgage up for renewal? Would you like to renegotiate a lower interest rate? Are you interested in changing the length of your upcoming term? Are you satisfied with your current lender?
Mortgage renewal is your opportunity to shop around for the best terms of your next mortgage contract. Take a look at what other lenders have to offer before you renew with your current lender. It could end up saving you thousands of dollars!
The mortgage professionals at DLC First Pacific Mortgage will connect you with competitive lenders ready to negotiate better rates than what your current lender has to offer. We work with a variety of financial institutions, from credit unions to chartered banks, to help you access a wealth of lending capital.
DLC First Pacific will be there every step of the way to ensure your mortgage renewal terms are fair and equitable.
As your mortgage term ends, you have to pay off your mortgage balance to renew for another term. Luckily, every mortgage renewal gives you the chance to review your financial goals and see if they align with your current mortgage contract. Your existing lender will mail you a renewal slip to sign and return. But before you seal the deal, consider what your needs are and whether they will be met with the terms in your mortgage renewal. We recommend taking these proactive steps before your next mortgage renewal:
Get your calendar out and mark the date your current mortgage term ends. Count backwards 120 days from your maturity date, and this is the day most lenders allow you to begin the early mortgage renewal process. In other words, you can renew early with your existing lender without being subject to a prepayment penalty.
A lot can change in the span of a mortgage term. Your financial goals may have evolved based on changing life circumstances. Your income may have significantly increased or decreased. Perhaps you’ve expanded your family, sent your kids off the university, or retired from the workforce. You should consider the possibility of a move within the next 5 years or whether you’ll need to access some equity to fund a major project in the near future. Be mindful of your needs when selecting a mortgage program.
After you’ve outlined your financial goals, you should write down all the things that you are looking for in a mortgage product. It may be helpful to ask yourself the following questions to determine your needs:
If your mortgage agreement is with a federally regulated lender, they are required to issue you a renewal statement at least 21 days before the existing term matures. Typically they will send you their lowest posted rate in the mail and their renewal offer is good for the last 30 days of the term. A renewal statement contains the same information that is in your existing mortgage contract, including:
The document must also include a guarantee that the interest rate presented in the renewal statement will only increase on your scheduled renewal date.
By now, you will have done your research and found out whether or not you are getting the best mortgage rate on the market. If not, you’re free to try to negotiate something better. Your current lender may not be able to match the best mortgage rate. So if you’re approaching your last 30 days, make an appointment with a mortgage broker at DLC First Pacific Mortgage to compare offers from other lenders.
Once you’ve explored your options, reassessed your financial goals, checked off your mortgage needs and received a mortgage renewal statement from your current lender, it is a decision time.
Finally, you’ll need to decide which lender is offering the best mortgage product and interest rate. If your current lender provides the most favorable offer, you can simply sign the mortgage renewal offer and send it back in the mail. But if you think you could negotiate a better offer, make an appointment to meet face to face.
If you’ve decided to switch your current mortgage loan to another lender, the new lender will need to approve your mortgage application. The criteria they use to determine your eligibility may differ from those used to qualify you for your original mortgage.
Switching to another lender may offer long-term savings but there are other costs to consider. You may be charged an appraisal fee, a discharge fee, a transfer or assignment fee from your current lender and legal fees. When you’re negotiating terms, ask if the new lender would be willing to cover your costs to switch.
Remember, if no action is taken, your mortgage may renew for another term automatically. To ensure you get the best interest rate and terms contact DLC First Pacific mortgage before it’s time to renew.
If you’ve decided to switch lenders and your new lender is a bank, you may be required to prove you can afford payments at a qualifying interest rate which is normally higher than the rate outlined in your mortgage contract.
A stress test is not necessary if you have mortgage loan insurance or if you are renewing with your own bank, however using it is at the bank’s discretion.
If you do not have mortgage loan insurance, the lender must use the higher interest rate of either:
When you switch lenders you may have to pay new mortgage loan insurance premiums if the length of the amortization period or amount of your loan has increased.
Be sure to let your new lender know that you have mortgage loan insurance on your existing mortgage. Your existing lender can provide you with a copy of the insurance certificate when you get your mortgage contract, so you can avoid paying premiums twice.
You may also need to consult a notary or lawyer to sign the registration documents in your mortgage contract.
If your mortgage is registered with a collateral charge, you will probably have to pay to remove the charge from your existing mortgage before you can register a new one with a new lender. You must transfer all loan agreements secured by the collateral charge to the new lender or pay them off completely.
Ask your notary (or lawyer) or lender about the status of your mortgage registration well in advance of your renewal date to find out what options are available to you. Or you can contact DLC First Pacific Mortgage if you want your renewal process go smoothly and hassle free! No Cost, No Obligation!