Renewing / Switching Your Mortgage

Renewing Your Mortgage

Just like an annual financial plan you should review your mortgage regularly. Renewal time is the ideal time to reassess your options and re-examine your overall financial situation. We're available to answer any questions you have and to help you choose the options and best lender that's right for you. When your mortgage is due for renewal sometimes the rate guarantee period can prove to be critical. Some lenders provide a 30-day period and some 60 days to give the opportunity to lock into your next term. Obviously the longer the better because if rates moved up you may have missed the boat. This is where we can help... contact us 4 months before your renewal date since we can arrange a rate hold for 4 months—beating your current renewal often by 90 days – this will gave you rate protection especially in a increasing rate market.

At renewal, you have the option to pay off all or part of your mortgage, change the term (the interval between renewals), change the amortization period (the time required to fully pay off your mortgage), or change the frequency of payments (weekly, etc.). With this flexibility, you can adjust your regular payments to suit your circumstances, which may have changed.

No Cost to Switch to Other Banks

If your mortgage is up for renewal with a major financial institution, switching it to another lender is easy. Quite often when we compare your renewal rate to other lenders hungry for your mortgage, they will offer you a better deal. This is done at no cost to you because the new lender who wants your business will pay for the legal and appraisal fees to do the switch.

You may have a discharge fee charged by your current bank however the savings in switching will outweigh the costs if proven to be beneficial.

Give yourself plenty of time to shop before your mortgage renewal. Before your mortgage has to be renewed, you choose the day, month and year when you want to receive your reminder.

Should You Break Your Mortgage for a Lower Rate?

Yes and no. When you break your mortgage contract to renew your mortgage at a new rate and a new term, you're faced with a penalty charge to reimburse your financial institution for the lost interest income. As a basic rule of thumb, the prepayment charge is based on three months interest or the interest rate differential (that's the difference between your present mortgage rate for the balance of your term and the current rate you want to take out), whichever is greater.

The amount of the prepayment charge will tell you whether or not you should renegotiate your interest rate. Generally speaking, the shorter your remaining term - ideally less than a year - the smaller the penalty, and the more attractive early renewal becomes. On the other hand, the longer the term left on your mortgage, the greater the prepayment penalties, which makes early renewal less desirable. At Mortgage for Less we can calculate the costs verses the benefits of breaking your mortgage early.

We can Calculate It for You

Since we have information on most lenders, we can easily make the calculations to determine if you should break your mortgage to take advantage of current lower rates. We'll make your decision making easy for you.

4 Easy Steps to Switich Your Mortgage

1. Apply online or give us a call first

When we have your information we can go ahead and get you approved with t he right lender and get a rate hold for up to 120 days. Within the 120 days if rates go down—you will also obtain the lower rate.

2. Mortgage approval documentation

Once your application is approved you'll receive a mortgage approval letter outlining the documentation you'll need to finalize your mortgage. We send you approval via email or fax – whatever you like. Then we discuss all the terms and conditions. We will provide you with unique strategies on how to pay off your mortgage as soon as possible... Your bank will not do this--- they want your mortgage forever – our goal is to shorten your amortization.

3. Finalizing your mortgage

We make the arrangements to get you home appraised at NOT COST TO YOU. After the appraisal and close to your switch date you will meet with a legal representative to sign your final mortgage documents and you will need to provide personal identification.

4. Welcome to Your new Lender! We are there to help

A welcome letter will be sent to you verifying that your mortgage has been transferred to the new bank / institution. Now that your mortgage is transferred keep in mind as your Mortgage Broker we represent you—so when you have questions – we can assist you quickly. Also throughout your mortgage we are here to provide you with advice and strategies.

Documentation for Switching Your Mortgage

• Complete your mortgage application
• Provide your current Mortgage Statement or your Renewal Letter
• Income Verification- typically your Job Letter and Pay Stub. ( For self employed – a NOA –Notice of Assessment )
• Your Home Insurance Policy

CONTACT US TO HELP YOU ANSWER THESE AND OTHER QUESTIONS!