Did you know that you’re not obligated to stay with your current mortgage provider once your mortgage term is up? Many people simply receive a renewal email or notice in the mail and think that they are tied into working with the same lender until they’ve paid back the entirety of their mortgage. However, the choice is yours! You’re free to shop around for a new provider based on your financial goals or your lifestyle situation.
Here are a few steps to follow when renewing your mortgage:
Consider which options are out there
Most lenders will let you start an early mortgage renewal process 120 days before your current mortgage’s maturity date. This is the earliest date that lenders will let you start the process without having to pay a prepayment penalty for breaking your term before it’s expiration date. Start researching which options are at your disposal in terms of rates, prepayment options, and other conditions so that you are able to negotiate with that knowledge in mind and find a provider that’s a better fit for you.
Map out your financial situation
Chances are that your personal finances have changed since you first signed for your mortgage. You might have received a raise at work, had children, paid tuition or even retired – all of which impact the amount that you can afford to squirrel away towards paying off your home each month. Determining what your financial needs are will allow you to choose a mortgage option that’s right for you.
Determine which of your lifestyle factors could affect your mortgage
Will you be moving in the next few years? Do you foresee yourself receiving a large bonus or inheritance sum in the near future? Is there a chance that you might be able to pay off your mortgage entirely in this term? Considering these types of lifestyle factors will help you choose a mortgage product that suits your needs.
Make a decision that suits your needs
Now’s the time to decide which lender provides the best option for your financial situation and lifestyle! Your mortgage broker can help with that decision. Keep in mind that if you’re switching lenders, some extra documentation will be required by the new lender — such as employment and income