Mortgage renewal time provides many opportunities to save and align your mortgage terms with your short and long-term plans.  Leaving yourself enough time is essential to make the most of the options to give yourself the most flexibility possible, and to grow your net worth.

Opportunities at Renewal Time

You have many options available to you without paying a penalty at the end of your term at renewal time, options which are not always readily apparent.

• Better Interest Rates and Terms: As your mortgage consultant, I shop across banks, trust companies, credit unions, and other mortgage lenders to compare rates and terms with what your lender offers at renewal.
• Switch To Fixed or Variable: Consider switching from a fixed-rate to a variable-rate mortgage, or vice versa, based on market conditions and your financial plans.
• Add a Home Equity Line of Credit: Give yourself the flexibility of accessing some of your home’s equity to renovate, invest in other property, or cover other expenses now or in the future. If you’re getting close to the end of your career, this is an important step in planning for retirement and time is of the essence to qualify before reducing your income from employment.
• Adjust Mortgage Terms: Modify the term length of your mortgage to suit your financial plans taking rate forecasts into account
• Increase Prepayment Privileges: If paying off your mortgage faster is important. switch to a lender offering higher prepayment privileges without penalties.
• Increase Your Amortization: Lower your monthly payment by increasing the amortization on your mortgage. If cash flow is a concern, or if you’d like to invest at a higher rate of return than you’re paying on your mortgage, increasing your amortization might best suit your plans for the time being.
• Consolidate Debt: Use the renewal time to consolidate other debts into your mortgage for lower interest rates than you’re paying currently.
• Access Equity: Take advantage of your home’s increased equity for renovations, to invest in other property, or other financial needs by increasing your mortgage, or adding a Home Equity Line of Credit (HELOC).   If you’re getting close to the end of your career, adding a HELOC is an important step in planning for retirement.  Time is of the essence to qualify before reducing your income from employment.
• Consider a Reverse Mortgage: Would converting to a reverse mortgage relieve financial pressure? If you’re 55 or over, you may be able to convert your existing mortgage, stop making mortgage payments, and cover other financial needs.  The property remains in your name and you can still leave your property to your children or others.  Property taxes can typically be deferred too.

Benefits of Starting Early

• Maximize Savings: Early engagement allows a thorough comparison of current mortgage rates and terms available to you.
• Optimal Transfer Window: Transferring your mortgage to another lender after your renewal date is possible. However, your lender will likely charge you higher interest for each day of delay past the renewal date, and interest can add up.  Transferring as close to your renewal date will save you the most money.  In some cases, transfer costs can be covered by the new lender and transferring on time will ensure you maximize your renewal time savings opportunities.
• Avoid Last-Minute Stress: Starting early prevents rushed decisions and ensures a smoother transition, properly aligned with your short and long-term financial opportunities.

Discussing with me ahead of time will help set you on track to make an informed choice.  Anticipate your options in advance to secure the best value available.  Contact me any time to plan for your next renewal.  I am always happy to help.

Image Source: Karen Vardazaryan Unsplash