Is your current mortgage about to expire? Are you planning to get it renewed? Every mortgage contract is applicable for a specific period of time known as the mortgage period. This period ranges from a few months to five years or plus. When you get a contract with a lender and are unable to repay the loan amount, you have to get it renewed.
Unless the balance after the home loan term is over is not paid in full, mortgage renewal in Abbotsford is a compulsion. Most homeowners require multiple renewals to pay back in full.
Documents Required For Mortgage Renewal
- Copy of your property tax statement
- Copy of your current lender offer
- Copy of your current mortgage statement
- Copy of property insurance
- Void cheque to set up payments with the new lender
Every renewal is different. A lender may require additional mortgage renewal documents in Abbotsford depending on your unique scenario.
Review Your Mortgage Renewal Needs
Before getting your loan deal renewed with the same lender, it’s advised to search for a better deal. Determine the actual amount you still need to pay to choose the right renewal period. If your finances are working just right, opt for a shorter mortgage period. In case, you think financial burden can cause a delay, choose a lengthy mortgage period. This will ensure repayment flexibility for an investment property mortgage in Abbotsford.
To find the right deal, make sure:
- you increase your payments to pay off your mortgage sooner
- you choose a mortgage that saves on interest
- Do you prefer changing your payment frequency
- you want to consolidate other debts with higher interest rates
Prepare Your Renewal Statement
For mortgage contracts signed with a bank or any institution, the lender is required to provide a renewal statement at least 21 days before the term ends. This paper or electronic statement contains the following information:
- the balance or remaining principal at the renewal date
- the interest rate and the mortgage term
- the payment frequency
- any charges or fees that apply
For more details on mortgage renewal, consult your existing lender or mortgage broker.
Switch To Another Lender
If you are planning to switch to another lender, make sure he/she approves your mortgage application in advance. The criteria followed to check your qualification differs from one lender to another.
The cost of changing lenders depends on:
- Setup fees with the new lender, including discharge, registration, and transfer
- An appraisal fee to confirm the value of your property
- Other administration fees and switching costs
Mortgage Loan Insurance Premiums When Switching Lenders
When it comes to mortgage loan insurance, inform your new lender about the one you already have. This could save you from paying mortgage loan insurance premiums twice. Ask your existing lender to provide you with a copy of the insurance certificate.
You need to pay a new mortgage loan insurance premium, if:
- The amount of your loan grows
- You extend the amortization period
The registration documents that are part of your mortgage contract must be signed by you. If you have a collateral fee on your existing mortgage, it’s advised to consider switching mortgage lenders.
So, this blog was all about mortgage renewal and briefly listed the documents you need before applying for a mortgage renewal in Abbotsford. For more details on mortgage renewal, contact our expert brokers at Sandhu & Sran Mortgages.
Whether you have decided to stay with your current lender or choose a new lender, always go with the options that best meet your interests, keeping your finances and mortgage terms in mind.