To help you navigate your first mortgage renewal, here are a few common questions you likely will want to know the answers to ahead of renewing your mortgage in 2020.
What happens if I don’t do anything?
You will receive a notice in the mail from your lender of the mortgage terms and the rate they have offered you. Typically, they ask you to sign and send it back but if you don’t do anything, most lenders will automatically renew your mortgage and send you back a notice saying your mortgage has been renewed. Although you can let you mortgage renew like this, you’re missing a big opportunity to negotiate a better interest rate which could save you thousands long term.
What happens if I want to change lenders?
If you want to change lenders you can absolutely do that. In fact, your renewal period is the perfect time to seek out new lenders, better terms, and lower interest rates. Be sure to contact your mortgage broker to start looking at mortgage options and rates about 60 days in advance of your mortgage renewal to make sure you don’t have to rush through the process. You can start negotiating rates as early as 120 days in advance if you really want to get a jump on the process but, 60 days is typically ample time.
What happens if I have a better credit? Can I get a better mortgage rate?
If you have a better credit rating than you did previously when you secured your first mortgage you’ll want to let your current lender know while negotiating a better rate or you can change mortgage lenders and have your mortgage broker submit a new application to different lenders. Negotiating the best rates and options on your behalf is after all what they are there for and, you don’t pay them anything to do so. Talk about a win-win.
What happens if I don’t have the same job or salary as I did before?
If you don’t have the same job but, you make a similar income that won’t change anything really. If you’ve changed jobs and make a dramatically lower salary that’s where things get a little trickier. If your mortgage is in good standing with your current lender, it’s smart to stay with that lender and renew for the rate they offer to avoid your interest rates going up because of the change in income.
Throughout your life as a homeowner, things change. You might get a new job, need a bigger house, experience separation, divorce, lay off, or inheritance. That’s why it’s important to work with not just a great mortgage broker but a financial partner like myself. Balancing out your finances, working towards long-term financial goals, and making sure you have the insurance you need in place to prevent financial pitfalls throughout your life is better navigated with a trusted partner by your side. If you’re wondering which path to take when it comes to your mortgage renewal or any other financial matter in your life right now, give me a call at 780-288-0643, and let’s tackle that decision together.
Tatum Neufeld, BComm
Mortgage Broker • Mortgage Tailors