Tips for Mortgage Renewal Time

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What is Mortgage Renewal Time?

Unless you can come up with the cash to pay off your remaining balance of your mortgage in your first term, it is time for a mortgage renewal. In simple terms, a mortgage renewal is the process of taking the outstanding balance of your mortgage and renewing it for another term at a new mortgage rate (and hopefully a lower rate than your current one). You know it is that time when you receive a renewal slip in the mail. This slip will have a new mortgage rate and term offer that you may sign and send directly back if you agree. You should carefully check the terms before you sign, however. The cheapest rate may not necessarily be the best rate as some may think. You want to have other options such as the ability to pay extra if you wish and you should read the fine print on penalties if you decide to break your mortgage early. Continue reading this article for some key tips on what you should do at mortgage renewal time.

1. Determine Your Current Financial Goals

Before you sign your mortgage renewal slip you should consider your financial goals and see if your current mortgage provider can offer you something to better suit your needs. For example, if you currently have a 5 year fixed mortgage term, the renewal slip will most likely be for another 5 year fixed term. If you think you will stay in your home for that long then it will work out. If you feel like you might move or downsize, you may want a 3 year term instead.

2. Shop Around Early

We all know the common phrase “the early bird gets the worm” and this is very true of the mortgage renewal process as well. You will probably get the mortgage renewal slip in the mail in the last 30 days of your mortgage term, however, you can start your negotiations as early as 120 days before your maturity date. You can find this date on your mortgage contract and count back 120 days to see when you can shop around and negotiate. If you can’t get a better offer than what they initially make you, you will have plenty of time to shop around at other lenders. It is a good idea to give a mortgage broker time to find the best rate for you and to get all the paperwork ready.

3. Ask for a Better Mortgage Rate

Mortgage renewal slips make it way too easy for you to renew without looking around but you do not want this convenience to end up costing you later on. Most people are too scared to try to negotiate with their lenders or they simply do not know that there are other options and that they can, in fact, ask for a better mortgage rate. But the truth is you can ask for a better mortgage rate and if lenders want your business they will offer you one. Don’t be afraid to switch providers at renewal time if you want a better rate. If you take the route of switching, a mortgage broker may be very beneficial for you to save yourself time because a broker can run your credit report once and match you with lenders that will work with you. Do your research before you begin negotiations and always ask for a better rate.There is always room for negotiations and you potentially land yourself a more competitive offer. Begin shopping around early! Do not leave it to the last minute.

Renewing your mortgage can be quick and simple by the convenience of signing a renewal slip that comes right to your front door. But sending this signed slip back will not necessarily get you the best mortgage rate after all. By following these three tips that were discussed in the article (planning out and knowing your financial goals, shopping around early and asking for a better rate) you will be sure to end up with the best lender, most beneficial terms and lowest rate for your personal financial situation. Do your own research beforehand and work with a mortgage broker! Do it right and save yourself a ton of money and precious time!