Sometimes, days fly so fast, especially when you are paying off your mortgage. There will come a point in your life when you may be given the opportunity to renew. Before engaging into mortgage renewal, however, you have to consider a set of factors that may affect your decision. Rates may be higher based on what is current in the market. There are times that it can be lower though if you are lucky enough. You have to review your mortgage renewal options first if you want to take advantage of the offer. Here are things to take note of in the process.
Be familiar with the renewal process
If you are busy, you might not really be aware it is time to renew unless you get the renewal statement which is given at least about 21 days before the existing mortgage term ends. The statement contains every piece of vital information you must know including the amount still to be paid for the principal loan, the term and the interest rate. You have the option to either pay the current mortgage in full or renew it for another term.
The offer itself is already tempting. Take note that it is important to find better options and rates in the market. You might also want to consider if you will switch from the current bank or lender at renewal time. When making a decision, it is important to know that you have control over the mortgage renewal process.
Do you really need the mortgage?
This is one question that should be brought to mind before signing the mortgage renewal letter. Actually, you should have reconsidered all these things months before the end of your current mortgage term. Make your own research and do some paperwork. The advantage of renewing an existing mortgage includes the fact that you do not have to go through the same process as when you applied for an initial mortgage.
Alongside this question, you have to ask some other questions regarding mortgage renewal. Can you possibly increase your mortgage payment amortisation so that you will be able to pay the entire amount sooner and at a lesser interest rate? Are the rates lower than the previous one? Can payment frequency be changed? Did your lender or broker deliver a good job with regards your mortgage? Do you want to consider debt consolidation?
Take this as a time to reassess your financial situation
You have to consider mortgage renewal time as a period to assess your current financial situation. It is not just about looking for a good interest rate that will make paying entirely easier for you. You should also rethink about the various mortgage options that you have and compare and contrast one from the other. You have to make sure that you are getting into a win-win situation should you consider to renew your mortgage.
Have you considered getting into debt consolidation mortgages in Montreal instead of renewing the mortgage that you have? If you do, then give us a call. We can help you come up with a better decision when applying for new mortgages.