(Nov 22, 2023)
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The process of renewing your mortgage is a pivotal moment that ultimately influences your financial landscape for the coming years (in Canada, that’s typically a repeat frequency of 5-year terms). As your mortgage maturity date approaches, the question of whether to renew with your existing lender or explore options with a different bank often arises. Beyond the considerations of interest rates and terms, a more pressing question occupies the mind of a homeowner: Are there any fees if I choose to renew with another bank? The short answer to this question is, no, not for you. While there are costs associated with switching to a new lender, it’s the new lender that covers these expenses, considering them part of the “cost of doing business.”
Before deciding to switch, it’s essential to do a quick cost analysis. Reach out to a mortgage broker well before your maturity date, and discuss your current lender’s renewal offer. A competent broker should quickly assess whether they can match or surpass your current offer. If a better deal is on the table, the next step involves some math: calculate your new payment and the overall savings throughout the mortgage term. For instance, if a lower rate translates to a $100 reduction in your monthly interest charges, the accumulated savings over a 5-year fixed term could amount to $6,000. This financial gain becomes the deciding factor: is the monthly reduction and the long-term savings worth your time? If not, take the simpler plan and sign off with your current lender for the higher offer.
For those with the penny-saved-is-a-penny-earned mindset, the process of switching lenders and requalifying is always a worthwhile effort. However, others may find it less compelling.
What’s involved in this process, you ask? When switching to another lender, keep in mind that they don’t know you, so a complete application, income and property documents, and signing with a mobile agent are required. The good news? There’s no direct cost to you – only an investment of your time.
How long does the qualification process take, and what’s required?
The first step is completing the application. If you’re dealing with me, the online application takes about 5 minutes, with questions you can answer off the top of your head. After completing the application, a custom document request list is generated and sent separately. Once your documents are received, your application is adjudicated within 3 days. If approved, you sign the lender’s commitment, satisfying any remaining conditions. The lender then works behind the scenes, preparing formal documents and instructions for their legal signing agent. Your role? Waiting for a call from the signing agent for a doorstep signing wherever is convenient for you. The rest – handling funds, modifying title registration, and updating home insurance details – is managed by your mortgage broker, the lender, and its legal team.
In summary, switching to another lender for your mortgage renewal is a fee-less transaction. However, the primary hurdle preventing many from taking this step is the effort involved. Surprisingly, a significant number of homeowners renew at the first offer from their existing lender. Don’t fall into this trap. Make the call, crunch the numbers, and then decide – the figures will often speak for themselves and guide your decision-making process.
Mortgage coming due? Call or text Marko Gelo right now at 604-800-9593, or Click Here to schedule a free, no-obligation phone call with Marko. You can also call Marko on WhatsApp.
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Contact Marko, he’s a Mortgage Broker!
604-800-9593 cell/text | Vancouver (Click Here to schedule a call with Marko!)
403-606-3751 cell only | Calgary (Click Here to schedule a call with Marko!)
Email: gelo.m@mortgagecentre.com
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