Do you have a mortgage that is renewing soon? If yes, the question you may be asking is ‘is renewing your mortgage the same as mortgage refinancing?’ The answer is no. Refinancing a mortgage is when you renegotiate the current loan agreement, whereas renewing a mortgage is when you sign new terms with your current lender for another term. Reviewing the benefits of a refinance vs renewal will help make a more informed choice.
As you review mortgage renewal vs finance Canada, you should note that refinancing attracts a penalty known as Interest Rate Differential. Some lenders will charge extra fees on top of the Interest Rate Differential. Our specialists will answer the question of can you refinance your mortgage at renewal and help with refinancing mortgage Canada. We will further help you know whether refinancing or renewal will be best for you. Contact us now to find out more.
After getting a mortgage with a lender, you will get into a contract that is valid for a specified period. This contract is known as the mortgage term. At the end of a mortgage term, you will need to renew your contract if the mortgage is not cleared. So what happens when you renew your mortgage?
If your current mortgage contract is with federally regulated financial institutions like banks, the lender is required to provide a renewal statement 21 days before the end of the current term. The lender is also required to notify you 21 days before your mortgage term ends if you will not renew the mortgage.
A renewal statement includes the following:
It is a pretty straightforward process to renew mortgage Canada. If you still owe money to the lender, all the terms you negotiated and agreed to will stay the same. You will only be required to sign the renewed contract. A mortgage renewal is recommended if you are happy with the current mortgage terms, and research suggests you are getting the best value.
Brokers are not just helpful when applying for a new mortgage but also when you want a renewal. Your broker will explain how does mortgage renewal work in Canada and help you determine whether a renewal is better. The broker also makes you aware of the drawbacks of a renewal and discusses early renewal options and renewal problems. The broker will also answer the question of can you pay your mortgage at renewal?
Knowing what a mortgage renewal entails will help you be more confident in your choices as you renew your mortgage. Contact us for help.
Mortgages are a huge commitment; some last more than two decades. The best thing is that the mortgage you start with does not have to be the same one you finish with. This is all thanks to the option of refinancing mortgage Canada.
When you refinance a mortgage, you take a new mortgage to replace the current mortgage. The new mortgage can be the same amount as the current mortgage or be of a larger amount. When done properly, refinancing a mortgage can save you money. It is, however, crucial to understand how does refinancing a mortgage work before you get started.
What is a mortgage refinance?
A mortgage refinance allows you to end the current mortgage and start a new one. You can refinance with your current lender or with another lender. Refinancing a mortgage gives you the option of applying for new rates, changing the conditions and borrowing more cash.
Unlike a mortgage renewal that can only be done at the end of a mortgage term, you can do mortgage refinancing during or at the end of the current term. However, you should note that refinancing before the end of your current mortgage term will attract prepayment penalties. This is because you will be breaking your terms early.
If you need to make changes to the current rate, switch to another lender or access the equity in your home, a mortgage refinance is what you need. There a several reasons why you may want to refinance your mortgage:
Can you refinance a mortgage in Canada? The answer is yes. Our team will advise you on your options and help you get the best terms. Contact us now to find out more.
Refinancing a mortgage offers myriad rewards. The key advantages you get from choosing to refinance mortgage include:
A mortgage refinance is not without drawbacks. The two main disadvantages are:
The advantages of refinancing far outweigh the disadvantages. To benefit the most from refinancing, it is highly recommended to work with a broker. Our team will evaluate all your options and guarantee you get the best terms.
If your mortgage is from federally regulated institutions, you will be provided with a renewal statement at least 21 days before the current term ends. Your lender is also required to give you a notice 21 days before the end of your term if you will not be renewing your mortgage. Paper statements or electronic statements will be provided depending on the communication method you prefer.
The renewal statement from your lender must include the following:
The renewal statement will also state that the interest rate that is offered will not increase until the renewal date. Some lenders will give you a mortgage renewal contract on the same day you receive the renewal statement. Always work with an experienced broker to better understand the mortgage renewal process.
The decision to renew or refinance your mortgage requires serious consideration. Both options offer their share of benefits. As you compare mortgage, refinance vs renewal, the key benefit of a refinance is the ability to borrow more using the equity you have built-in your home and the ability to refinance at any time. The beauty of a renewal is the ability to continue enjoying the same terms you have always enjoyed.
As you evaluate mortgage renewal vs refinance Canada, you should note that the decision on whether to renew or refinance depends on what you have planned for the future. For example, if you need extra money to pay for renovations, refinancing will be ideal. On the other hand, if you want to continue with the current trajectory in mortgage repayment, a renewal will be great.
Can you refinance your mortgage at renewal? We are here to answer this question. Give us a call.
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