Everything You Need To Know About Mortgage Renewal

Are you aware that at the end of your loan term, you can choose to renew your mortgage exactly as it was with the same terms and conditions? Well, it is the perfect opportunity to negotiate with your bank as well as your mortgage brokers to get the terms and conditions based on your current specific needs. It is normal for an individual’s financial situation to change over time. You must ensure that your mortgage also adapts to your new financial situation and requirements. This is where mortgage renewal comes in handy.

What is mortgage renewal?

When you purchase a new mortgage with a lender, your contract has a fixed term, this is called the mortgage term. The loan and interest rate are agreed upon and can vary anywhere between six months and ten years. At the end of the term, the borrower will need to renew their mortgage. You may need to renew it several times before paying your entire loan amount in full. If you have completely paid off your loan amount, there is no need for you to renew your mortgage. However, through mortgage renewal, the borrower has the option to customize their contract to suit their specific needs. From changing the length of the term to deciding if you want the interest rate to be fixed, this is the ideal time to determine if your loan terms are correct for you.

Evaluate your needs before renewal

Before you renew your mortgage, you must take the time to evaluate and analyze your financial needs and goals. Since the last time you negotiated with your lenders, your plans may have changed. Below mentioned are some of the questions you can ask yourself if your current mortgage rate and terms are ideal:

How is your current financial situation? Has it improved or gotten worse in recent years?
Are you satisfied with your repayment schedule? Does your budget allow it to pay your loan faster?
Are you considering moving and need to sell your property?
Do you require additional funds for any major renovations? Or are you looking to buy a second house?
Are you happy with the services of your current lender?

When is the best time to renew your mortgage?

The best time to renew your mortgage is six months before the end of the contract because it gives the borrower plenty of time to negotiate and end up with a fair deal. Ensure your lender sends a renewal notice 21 days before the end of your term. It must contain the following:

The mortgage experts you can rely on

In addition to helping you choose the right mortgage when it comes to renewal, we also offer valuable advice that will help you make a well-informed decision during that period. To find out more information on mortgage renewal or more about our mortgage brokers, please do not hesitate to get in touch with our team at AKAL Mortgages Inc today to book an appointment.