Renewing & Switching Your Mortgage
When the term of your mortgage is about to mature, most lenders will mail out their renewal agreements a few weeks before the maturity date. This can cause you a lot of grief, especially if rates start to increase before your mortgage comes due. Or why not contact us to see how DLC Funds can help.By obtaining a pre-approved mortgage, our Mortgage Agents can guarantee your rates up to 120 days before your mortgage comes due. This protection helps you in case there is a rate increase in those last couple of months prior to the mortgage maturity. This could save you thousands of dollars down the road.
When your mortgage is due for renewal, it is a great opportunity to make sure you have the right mortgage for your current needs. As the mortgage is fully open on maturity, it is the prefect time to pay down your mortgage. Whatever you can afford will have a significant impact on your mortgage and your ability to be mortgage-free sooner. It is also a great time to consider a more frequent payment method, such as bi-weekly or weekly to further reduce your mortgage principal. Try our Mortgage Payoff calculator to see just how much you could save!
Also, if interest rates have decreased since your last mortgage, you may want to consider keeping your payments at the same level as this will also allow you to pay down the principal at an accelerated rate.
SHOULD YOU SWITCH YOUR MORTGAGE?
To switch your mortgage means to move your mortgage from one financial institution to another. There are several reasons why people switch their mortgages, but the primary reason is that another financial institution is offering a better interest rate or mortgage terms. Another reason people switch is because they were unhappy or unsatisfied with their current lender.
What happens when I switch my mortgage? The new financial institution transfers your current mortgage balance and the remaining amortization period on that mortgage. Your new mortgage payments are then based on these numbers and the interest rate offered by the new institution.
When I switch my mortgage, can I refinance at the same time? Yes; however, each financial institution has its own policies with regards to the amount you can refinance without incurring fees. You also have an option of doing a switch with a total refinance but you will be subject to fees similar to that incurred with registering a new mortgage.
What are the costs associated with switching my mortgage? If you are simply switching your mortgage at renewal time to another financial institution then you should not be subject to any fees or payout penalties. If you decide you want to switch and increase your mortgage amount or lengthen your amortization period, then the mortgage would have to be re-registered and you would be subject to additional fees.(i.e. legal fees, appraisal fees, etc…)
How long before my mortgage matures should you I start the switch process? You should start the process between 90-120 days before your renewal.
