With all the hubbub these days about “the mortgage renewal cliff”, I thought I’d chime in with an easy to understand myths versus facts on mortgage renewal, and what your steps should be on how you approach your renewal.
If your mortgage is coming up, don’t stress about it. Instead, just read this. Once you’re through, you’ll be much calmer and you’ll have a plan of action.
And honestly, this isn’t a “just call me” type of article, but there’s definitely some of that, in the middle. Lots of useful stuff too.
The step by step renewal guide is at the end. Gather all the information, then decide if you want to call me.
Your mortgage is amortized over a long period of time. Essentially, the rate increase is spread over the next 25 or 20 years of your mortgage.
Yes, rates are higher than they were 5 years ago. But the increase is not as dramatic as the headlines make it sound.
Now let’s separate myth from fact.
Don’t panic about qualifying. If you aren’t making any changes, you don’t need to re-qualify, you’ll just need to negotiate the rate with your lender and eventually sign the renewal on the agreed upon rate.
If you need to borrow more money from them, or extend the amortization back to 25 or 30 years, then you’ll have to start a new application.
Requalifying and negotiating is where I step in. I help you find out if your existing lender can approve you (yes, maybe or no). I can also determine any other lenders that could approve your request.
This is part of my job. I can help you figure out if your lender’s offer is good, or garbage.
And there’s more to just looking up a rate online, and then calling your lender with it. Each mortgage is different. It really matters whether your mortgage is insured or uninsured.
I help you figure that out first. Then we talk about rates.
I can then tell you what other lenders are offering for rates. I can even help you negotiate your rate too (I tell you what to say to them).
And if the end result is that you stay with your lender, great! I’ll ask you for some referrals and a Google review. I help so many people without actually getting paid. It’s part of my job.
They’ll usually start contacting you about 6 months before your renewal date, and they’ll may make you nervous about rates going up, guaranteed. More below about renewing early (in myths).
On rates – at this point it looks like rates are holding steady or maybe even going down. Which tells me that its better to wait until closer to your renewal date to lock in a fixed rate (with your lender or with another lender).
There’s some strategy involved here, which I can help with, too.
Nope!
When your lender tells you that you can renew 6 months early, that only means that you can renew with THEM 6 months early.
You can’t change the mortgage to a different lender, unless you pay the 3 month interest penalty. With 6 months left to go, no one wants to pay a 3 month interest penalty.
So if I’m dealing with your renewal, we will usually payout your lender on the day of renewal, and not earlier, unless you really need to. We want to avoid any penalties.
Truths – you don’t have to requalify. You’ll probably get a good rate, even if you stay with your lender and not make any changes.
Myths – you have to requalify even with your lender. You can renew 6 months early. You can’t make any changes.
The above may be all well and good, but you’re still missing the main piece. So what are you going to do? Before you jump straight to the renewal guide, let me interject with one crucial point.
Even more important than a simple rate on the renewal, the renewal is an incredible financial planning point. An opportunity to really figure out what your options are, not just for your rate, but for taking money out of your equity and putting it to good use.
That’s the main reason why I think you should probably call me. The planning, and the execution of that plan.
The renewal step by step guide is still below, just keep scrolling past the “why you should call me” stuff.
What do you want me to say here? If you don’t call me, just call another guy? No! Of course not. Because I know I do it better than most (the planning and the execution).
Strategy. Asking you the right questions. Planning for the future. Kids. University. Cars. RRSPs. I ask you all the questions. Then, we figure out together if you think you need to grab some money out.
Say you’re at your highest income earning bracket now, but know that’ll go down, in retirement? Take money out to invest in your RRSPs. You lower your tax by a huge amount now, and take the money out in stages, when you need it, at a lower tax bracket.
I look at all aspects of your financial situation, and propose to you different solutions on how to make it that much better. I’ve helped many people buy rental properties by refinancing, and it’s really not that hard. But it does take, strategy.
We figure out every in and out on your financial plan, and make sure that it makes sense with your debt. Because I’m the debt manager. (link takes you to my disclaimer about titles).
And imagine, you figure all of this out in the span of 15 to 30 minutes, with me. The planner.
If you decide to move on with us to help you in any way (whether just for negotiation or something else), you can trust you’re in good hands (with me and my team).
The CV: I started tellering in 1999 when I went to business school (majored in finance and risk management), HSBC Banker from 2004 to 2009, sub-independent mortgage broker from 2009 to 2014, and started Olympic Mortgage in June 2014.
Since 2009, I’ve brokered around 1700 purchases (have to re-count, it might be more), 1000s of refinances, and some renewals, when it made sense for the client.
I’ve been around the block, and I’m happy to have a 100% track record. 0 deposits lost on purchases. Most happy clients in Victoria, according to the google reviews.
Yeah, I can be blunt at times, but I think my clients appreciate a little truth pill when they need it most. Believe me, I want what’s best for you. Because when you’re happy, I’m happy too.
I can’t do everything myself, so I have an amazing team that helps me get everything done.
We’re dialed in on making sure there aren’t any screwups along the way. We’re thorough. We’re prepared. We handle your file like experts. Clean and clear strategy and communication. You get the local team with every file we do, so you not only have one number to call, but two. And our people are right here in Metchosin, Colwood, Langford, Oak Bay, Esquimalt – we’re actually here in Victoria.
You get David on strategy, and you get the expert team on the admin of the file, and answering your questions along the way. We’re a tight ship, so to say. No stragglers here.
You may want to use your equity to:
If you’re any of the above you really should call me (yes) another mortgage professional (ugh), or your lender (I guess so), to discuss your options. Heck, you can even call both myself and the bank, just so you truly have that 2nd opinion.
Anyways. You aren’t really talking about your rate, until you know if you’re just renewing, or not.
I’ll lay out all your options, and let you know if I think it’s worth it to ask your existing lender. No obligations here, I’m happy to help you work out your options. I’m happy to do a 2nd opinion.
I help lots of people just in that first 15 minute conversation. And unless I’m really adding value by qualifying you for more money, or negotiating a much better rate with a new lender, I step aside.
Simple. Ask your lender for their absolute best rate on the term that you want. Not sure if you want fixed or variable? Well, you can call me and we can discuss that too.
I can tell you if I think we can get something much better, or I’ll tell you to take the offer.
Fill out some of the form or all of it, it doesn’t really matter. We will go over everything. Just tell us who you are and the best way for us to get a hold of you.
The “mortgage renewal cliff” makes for good headlines. But for most homeowners, this is simply a decision point — not a crisis.
Don’t panic.
Understand your options.
Make a plan.
And yes — call someone.
If that someone happens to be me, I’ll give you straight advice. Whether that means moving your mortgage or staying exactly where you are.