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How Long Before Your Mortgage Renewal Date Can You Renew Your Mortgage?

Do you have less than six months or less left on your current mortgage? If yes, you should have started exploring your renewal options with your current mortgage lender, including researching online with other lenders. A mortgage renewal usually takes place when your mortgage term is done or close to coming to an end. The best time to get started on renewing your mortgage is four months before the end of your term. The reason is, many lenders offer borrowers the opportunity to renew their mortgage four months in advance without needing to pay any fee on penalties or prepayment fees. What most homeowners fail to understand is that they do not opt to stay with the same lender. In many instances, they are able to find a better term and interest rate by shopping around with several lenders. The experts at Matrix Mortgage have years of experience in the trade to help clients find the best possible mortgage renewal solutions that suit their financial needs and future goals.

Four tips for mortgage renewal:

A few mortgages need to be renewed at least once annually before they are eventually paid off. Unless you have enough funds to completely pay off your balance in your first mortgage term, you are like most Canadian property owners who have a mortgage and by default by renewing it at the end of their term. It is a simple and straightforward process that takes the outstanding balance of your mortgage and renews it with another term at a better interest rate. You must ensure to pencil down the end date of the mortgage on your calendar. The lender also sends a slip close to the end of the mortgage which contains the new mortgage terms and rate. If the borrower agrees to it, they can sign and send the form back through the mail. However, it is best advised that you shop around for a bit and do your research before making a well-informed decision. Below-mentioned is four tips to ensure you renew your mortgage on time:

1.     Take into account your current financial goals

Before you sign the mortgage slip with the improved terms and rate, you should take into consideration your current financial goals. You have to ensure that your lender can offer a mortgage renewal product that suits your financial and future needs. For example, if your current mortgage term is fixed for five years, it is most likely that your renewal slip will be for five years. If you have a feeling that you will stay in your current property for that period, then it is a fantastic option. But if you feel that in the future, you might consider downsizing or relocating to a new city, you might also want to opt for a three-year mortgage term instead. Additionally, you have to consider other financial goals such as money earned from inheritance could influence your prepayment options. Also, consider if a mortgage renewal makes sense or getting a HELOC to access equity would be a better option. Having a clear picture of what you need in a mortgage will help you to decide on which lender to go for and the right mortgage renewal product to choose.

2.     Shop for a mortgage renewal product early

If your mortgage is a few months away from its maturity date, then it is time to get it renewed. As the saying goes, “the early bird gets the worm”, this is especially true when it comes to the mortgage renewal process. Your current mortgage lender will notify you that you need to get your mortgage renewed by sending a renewal slip thirty days before the expiry of the term. But you can usually start negotiating with your current lender or other lenders 120 days before your maturity date. To make sure you are up for it, find a maturity date on your mortgage contract and count 120 days back on a calendar. If you fail to negotiate a better offer with your current lender, you can switch to a different lender. However, you will not be able to change until the renewal dates arrive. This gives the mortgage broker ample time to offer you expert mortgage renewal advice and help you find the best product. Additionally, planning in advance also ensures your paperwork is complete beforehand, avoiding any last-minute scramble.

3.     Demand for a better interest rate

By sending you these mortgage slips, lenders find it easy to answer the million-dollar question raised by many borrowers – “Should I renew my mortgage now?”, by providing a stress-free way to renew their mortgage. Matrix Mortgage completely understands that every individual is busy, and providing them with a convenient service will do them a world of good. On average, lenders only offer their existing customers a discount on their current mortgage rate on a renewal slip. At times, these rates offered by your current lender is not even the lowest interest rate; there are usually far better rates that are extremely low available from other lenders if you do your research. Negotiating with your lender for a better interest rate on your mortgage renewal is imperative in today’s demanding economy.

4.     Try to get a better interest rate hold

When you are in the market shopping around for a better interest rate, it is a wise strategy to consider the services of a mortgage broker. Instead of you having to visit multiple lenders, a broker can take a look at your credit report and determine a list of lenders that will best suit your financial and personal requirements. Additionally, based on your credit score, they can advise you on what rate you could potentially qualify for if you decide to switch lenders. The process is fast, and sometimes on the first appointment itself; you can get your mortgage renewed. If by chance the interest rates go down, you can negotiate an even lower rate.

If you are looking to renew your mortgage? Matrix Mortgage can help you get the best terms and rates on your mortgage renewal. Please do not hesitate to contact our team for more information. It usually takes a week to process your mortgage renewal application.

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