Homebuyers in Brampton, Toronto, and the Greater Toronto Area (GTA) invest significant time and effort in securing their mortgages. However, many fail to realize that renewing their mortgage is equally important and a tremendous moment of opportunity. If you have a mortgage renewing in the next nine months, here’s what you need to consider –
- Don’t Settle for Less – Have Lenders Compete for Your Business: When securing your first mortgage, you benefited by shopping amongst lenders, so why not have lenders compete for your business when it’s time to renew? By exploring multiple options and getting the best mortgage deal, you can potentially save hundreds of dollars each month. Auto-renewing your mortgage without seeking fully discounted mortgage rates could cost you dearly. There are of course times when it makes sense to stay with your current lender and if that is the case, I can help you negotiate the best deal with them.
- Reassess and Optimize Your Mortgage: Mortgage renewal provides an excellent opportunity to reassess your goals and optimize your mortgage according to your changing needs. Consider the following:
- You can change your mortgage type and payment schedule: If your circumstances have evolved, you may find it beneficial to explore different mortgage types or adjust your payment schedule.
- You may be able to lower your penalty for early mortgage exit: It’s a good idea to evaluate whether you can reduce your penalty should you ever need to break your mortgage early, providing added flexibility and protection. Homeowners are often shocked at how high prepayment penalty fees can be when they break their existing mortgage.
- You may want to extend your amortization period: Extending your mortgage amortization period can be a great strategy to lower monthly payments to help you through a difficult time or enhance your overall financial flexibility.
- It might be a good idea to consolidate your high-interest debt: Rolling high-interest credit cards and other debts into your mortgage allows you to benefit from a single, lower payment, improved monthly cash flow, and savings on interest costs. Not to mention the considerable stress relief you will feel!
- Consider a Variable-Rate Mortgage in a Declining Rate Environment: With rates on the decline, this is when variable-rate mortgages truly shine. You can choose between fixed or adjustable payments. With fixed payments, as rates drop, more of your payment goes toward paying down the principal. If you opt for adjustable payments, your monthly payment will decrease with each rate cut. Why not ride the wave of falling rates with a variable mortgage and then lock into a fixed rate once rates have bottomed, or are close to it? The flexibility to switch to a fixed rate at any time is one of the biggest advantages of a variable mortgage.
- You may be able to tap into your equity for renovations or major expenses: Your mortgage can be a source of low-cost funds, allowing you to access equity for renovations or other significant expenses.
- Take Advantage of Pre-Approved Rate Guarantees: Many lenders provide a 120-day rate guarantee for pre-approved clients, protecting you against potential increases in mortgage rates. This can help you secure a favorable deal in a fluctuating market landscape.
- Securing the Best Deal with Vigilant Monitoring: Over the past year, the mortgage landscape has witnessed significant rate fluctuations, resulting in variations among lenders. With my vigilant monitoring, I have successfully secured favorable deals for my renewing clients by acting swiftly. I am committed to doing the same for you, ensuring you secure the best possible terms.
- Get a Head Start & Review Your Options Early: When you are nine months away from your mortgage renewal, get in touch for a comprehensive review of your options. Don’t limit yourself to the offerings presented by your current lender. There could be better deals available in the marketplace that can save you money. Even if you’re concerned about your credit situation, reach out now for a review of your circumstances and actionable strategies.
At mortgage renewal, you have the power to seize opportunities, save money, and optimize your mortgage according to your evolving needs. With so many strong options in the marketplace, I am here to help you find the best deal that meets your requirements. Don’t miss out on maximizing your mortgage renewal potential; contact Rakhi Madan today – your Brampton Mortgage Broker!
Note: As of November 21, 2024, the stress test will be removed for uninsured mortgage switches, making it easier to shop for the best deal when renewing your mortgage. You will no longer have to prove you can afford your mortgage at the higher stress test rate to switch your mortgage. Instead, you’ll only need to qualify at the contract rate offered by your new lender if you maintain the same mortgage amount and terms. This change simplifies the process and gives homeowners more flexibility at renewal. This was already the case for insured mortgages.
