The Truth About Mortgage Renewals!
Many homeowners are quick to renew their mortgage product with the same lender when their renewal date approaches. Though it isn’t wrong to renew a mortgage with the same lender at the end of its term, it can limit a person’s financial flexibility and deprive them of several opportunities. In some cases, the current lender may not have the borrower’s best interests in mind, may not offer them the best terms, or even a decent market rate. The existing lender may also not be looking at the borrower’s bigger financial picture and what their future plans may be.
To shed some more light on the best way to go about a renewal, mortgage specialist Jordan St. Pierre has explained the truth about mortgage renewals with a few facts. Keep reading to know what they are and to effectively plan your approach once your mortgage is up for renewal.
1. Stress test qualifications are not always a must
Many believe that they will be subject to harsher qualification rules when they renew their mortgage with a new lender compared to when they had qualified for their original mortgage. But, if a mortgage is default insured and was taken out before November 2016, the borrower may be grandfathered from the “Stress test.”
2. Your current lender may not be offering you the best rate
Another common misconception is that the current lender is offering a good rate. Quite often, this isn’t the case. Lenders rarely put their best foot forward when dealing with renewal clients. They believe that they already have you. They like to offer high rates to clients on renewal as most Canadians will take the first offer and not think twice about it. However, many lenders offer great promotional rates to new clients.
3. It’s beneficial to look for new options
While it is significantly easier to stick with the current mortgage, at renewal, borrowers have the opportunity to find a product that better suits their current financial needs as compared to what their lender may have to offer.
4. You will qualify for a new mortgage
The notion that they will not qualify for a new mortgage is all too common among homeowners at the time of their mortgage renewals. This makes them believe that they should stay with their existing lender. But this is not true. With a mortgage professional, you have options that will allow you to use different lenders who may have different allowances for your income, which can result in different qualification amounts.
5. Your bank doesn’t provide all the options or even the best ones
Mortgage borrowers often trust their banks as they’ve been using them for the longest time. But, by trusting in one institution, clients leave a lot of options and potential savings on the table. Fortunately, a mortgage professional can show you options that put your interests first and may show you options that your current bank is unable to offer.
6. Hire a mortgage broker
To really benefit during the renewal phase of a mortgage, homeowners need to acquire the assistance of a mortgage broker. These specialists have access to several lenders and are capable of finding better rates and great products that are more suited to their needs, and lenders with fair penalties, if applicable, and even better terms and privileges.
For more details on how to benefit during your mortgage renewal, reach out to Jordan St. Pierre at The Mortgage Centre. I tailor my services to suit your needs and work hard to find you the ideal options for your current financial situation. To get a complete idea of your requirements, I take the time to get to know you and build a relationship with you throughout your mortgage journey. Besides learning from you, I also educate you about mortgages, the process, concepts, lenders, and so much more.