Category Archives: Mortgage Renewal

Mortgage Renewal Process | Diamond & Diamond Real Estate Lawyers

Mortgage Renewal Process

How to Prepare for the Mortgage Renewal Process

At the conclusion of your mortgage term, if you still owe a balance on that property, you will need to renew the mortgage for another term.

This is also an opportunity to evaluate your current mortgage and compare it with any financial goals you may have recently set.

Your current mortgage provider will notify you of the upcoming renewal in the mail with a slip that you can sign back, but if you want be sure that all of your needs are properly met, you need to take a proactive approach when thinking about your mortgage renewal.

Why You Should Start the Mortgage Renewal Process Early

First of all, begin the process of shopping for your mortgage renewal several months before the term is up.

Approximately, four months before your renewal date many lenders will let you initiate the early mortgage renewal process. This could also assist you with avoiding a pre-payment penalty.

Reevaluating Your Financial Situation

You can also begin researching your options online during this time. Plenty of different things can happen with regard to your financial situation over the course of a mortgage term.

The financial goals that you have at the beginning of your mortgage term may no longer identify with your goals today. You might have retired, lost income or received a raise at work.

Make sure that you have considered all of these individual needs when evaluating a mortgage rate, product and term. Ask yourself the following questions in order to identify what you are looking for in a mortgage product when it is time to renew:

  • Will you be able to pay off the mortgage entirely in the next term?
  • Will you receive any additional funds like inheritances or bonuses that could be put towards your mortgage payment?
  • Do you have room in your budget to increase your payment amount on your mortgage?
  • Do you have any intention of borrowing more money from your lender over the course of this next term?

Being Ready to Renew Within 30 Days

The final stage of preparing for the renewal process is being ready to renew in the final thirty days.

Your lender has to send you a renewal statement, a minimum of 21 days before the term is up, but you will usually receive a renewal offer with their lowest posted rate, approximately 30 days before the maturity.

When it’s Time to Make a Decision

After you have considered your financial goals, outlined your needs and asked yourself critical questions; it is time to make a decision. Identify whether or not your current lender or another lender is offering you the best mortgage rate and product at this particular period in time.

Although there will be some paperwork involved in switching providers, you may be eligible to access better mortgage rates by doing this.

Your new lender’s qualifying criteria may be separate from your current lenders, so be prepared to do the research in advance so that you know what to expect.

Mortgage Renewal Tips | Diamond & Diamond Real Estate Lawyers

Mortgage Renewal Tips

What to Think About When Renewing Your Mortgage

Your mortgage payment may be a high expense in your monthly budget, but when mortgage term comes up for renewal, lenders may tempt you to stay with them by sending you out a renewal offer that simply requires your signature in response.

However, it is often in your best interest to do some research on your own.

Mortgage Renewal Tips

One of the most important steps that you can take without the mortgage renewal process is to start shopping around for a new mortgage rate as early as four months prior to your product renewal.

You may be eligible to ask for a better rate. Renewal offers will be mailed to you by the lender within the last 30 days of your mortgage term, but many will even send this sooner.

Mortgage lenders may offer you a discount off of the posted rate for being an existing client. However, it might lead to you paying a higher interest rate than you actually need to if you’ve shopped around instead.

Bear in mind that the best lender at the time of taking out your mortgage may not be the best lender now.

After you have identified a mortgage rate and a product that you are happy with, ask for a rate hold.

The majority of lenders will enable you to hold the rate for up to 120 days, meaning that you can come back later and achieve this rate. This gives you some peace of mind if you are concerned that your rates may otherwise go up before you renew.

Bear in mind that switching providers takes time and may lead to delays, paperwork or even some additional costs, but it can ultimately end up being worth it in the long run if you are able to reduce your existing mortgage rate.