3 Steps to Finding Out if a Switch is Right for You
1. Start With The Basics – Is Now The Right Time? And Is a Switch What You Really Need?
Before starting the legwork on a switch, there are a couple of questions we need to answer first. Have your circumstances changed since you originally got your mortgage? Are you wanting to borrow more money? Have circumstances around the property changed? We also have to find out if the move is even possible first. This can usually be done by pre-qualifying you over the phone with an easy 15 minute call.
2. Find Out The Cost To Payout Your Existing Mortgage.
If you’re paying out your mortgage early by switching to a new lender, you may be subject to a penalty. In order to find out if the switch will save you money, we need to know how much the penalty will be.
Here’s the easiest way of doing this – and you don’t even have to call your bank! With the information from a recent mortgage statement, you’ll be able to do the calculation using your lender’s online calculator. (All lenders are required by the government of Canada to publish mortgage prepayment calculations.) Important note – you will need to make sure you have the “initial bonus” rate that the bank gave you, as this number will determine your overall penalty. This information can be found on your original mortgage documents.
We can definitely help you with this step. Just ask! Also, it may be prudent to call your lender and confirm the penalty, just to be sure.
One important note – if you have a fixed rate mortgage with one of the “big 5” banks, your penalty may be much higher than you expect. This all depends on how long you have left in your term, and the original discount applied at the start of your mortgage.
3. We Do the Math, Together!
Once we have all the numbers gathered – your mortgage balance and your penalty, we will do some math on our end to determine if switching will be worth it. Basically, we find out if the interest savings over the remainder of the term will outweigh the penalty you’ll pay. We will then present you with your options backed up by amortization schedules.
Ok! If we’ve determined that a switch will save you money, it’s time to start the application process.
We make the process super easy, and you can start by contacting us or filling out our application.
Keep reading to find out a little more about the application process.
Check Your Credit Score, Or We Can Check It For you.
If your credit has changed, it might affect you!
You can easily get information about your credit at Borrowell & Credit Karma. Knowing your credit health gives us the knowledge as to whether you qualify for the lowest rate product, and which lenders are most likely to approve your application.
For more information and some tips on credit score health, check out our blog post here.
Let’s Collect the Documents and Start the Application!
Ok, we’re off and running!
In order to submit your switch application to the new lender, we need to collect a full document package. Every client situation is different, but typically the list will include:
- Income documents
- Mortgage statements
- Property tax statements
- Current bank statements
- Lease/rental agreements (if applicable)
Our Senior Underwriters and Documents Specialists will work with you to ensure that the process is simple and easy. Plus, we are always available to answer your questions. We’ll even set you up with your own personal portal login, so you can easily upload documents from your computer or the convenience of your mobile device!