Mortgage Professionals

Mortgage Maturity & Mortgage Renewal Process

Typically, homeowners stay with their current lender until the mortgage term ends because it is convenient. However, making a call to your bank and asking some educated questions on rates could be well worth the effort. As a Mortgage Broker, Leo works on securing a better rate than your bank’s best offer by accessing more than twenty different lenders competing for your business. One hour reviewing your situation could save you thousands of dollars in the long run. It’s time well spent.

If you still owe an outstanding balance on your mortgage at the end of your term, you will need to renew your mortgage for another term. Understandably, the last thing you want to think about after getting approved for a mortgage is having to begin the mortgage renewal process. It’s important to remember that mortgage renewal allows you to reassess your current financial goals and adjust your mortgage accordingly.

To help you better understand the mortgage renewal process, here are some tips and advice to consider:

mortgage maturity

Shop Around for The Best Rate

Your mortgage maturity is the day your mortgage term ends. For most lenders, they will let you begin the early mortgage renewal process up to 120 days (4 months) from the end of your term. As soon as you are 120 days out from your term ending, it’s recommended that you start shopping around for the best possible renewal rates. By starting to shop around as soon as possible, you can see what rates are available and be better prepared to negotiate with your lender.

Consider Your Financial Goals

Have your financial goals changed since your mortgage term began? Things like kids, a promotion or other unexpected expenses can all pop up and impact your financial goals. The great thing about going through the mortgage renewal process is that it allows you the opportunity to re-evaluate your goals and adjust your budget accordingly. Maybe you’ve got a promotion and want to increase your payments. Perhaps you have new expenses and want to decrease your payment amounts. Your mortgage renewal is a great time to evaluate your goals and adjust as needed.

Define Your Mortgage Needs

As you look around at different lenders, now is a great time to consider what you need in your terms of agreement with the lender. For instance, if you will be receiving a large inheritance or bonus in the near future, you might want to look at lump sum payment options. If you think you’ll be able to pay off your mortgage during the next term, you may want to consider any penalties for early payment. Much like you should have financial goals, you should also have ones for paying off your mortgage and ensure your lender understands these goals and will work with you.

Be Ready to Renew in The Final 30 Days

Your current lender is required by law to send you a renewal statement at least 21 days before your term ends. This is usually when your lender will mail you a renewal offer with a mortgage rate attached. By the 30 days out point, you should have completed enough research to know what other lenders are offering. These final 30 days can be used to negotiate your new terms with your current lender or begin to make appointments with other lenders.

mortgage renewal process

Reasons to obtain a second Mortgage

  1. Reduce monthly debt payments
  2. Have extra cash to spend on other investments
  3. Purchase a new home for up to 100% of its appraisal value
    • Be cautious, high-interest rates are charged due to a higher risk of defaulting.
  4. Consolidating credit card debts by reducing your rates and payments and converting compound interest into simple interest.
    • Repayment amounts are higher than the initial mortgage. If possible, it’s better to use these funds for larger expenses.

Securing The Best Mortgage Rates

It’s strongly recommended that you work with a trusted mortgage advisor during the renewal process. As an experienced broker, Leo will help you secure the best mortgage rates available to help meet your financial goals. If you’re going through a mortgage renewal and have any questions or concerns, give Leo a call today.