Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

A Step by Step Guide to the Mortgage Renewal Process

Did you know that you’re not obligated to stay with your current mortgage provider once your mortgage term is up? Many people simply receive a renewal email or notice in the mail and think that they are tied into working with the same lender until they’ve paid back the entirety of their mortgage. However, the choice is yours! You’re free to shop around for a new provider based on your financial goals or your lifestyle situation.

Here are a few steps to follow when renewing your mortgage:

  1. Consider which options are out there

Most lenders will let you start an early mortgage renewal process 120 days before your current mortgage’s maturity date. This is the earliest date that lenders will let you start the process without having to pay a prepayment penalty for breaking your term before it’s expiration date. Start researching which options are at your disposal in terms of rates, prepayment options, and other conditions so that you are able to negotiate with that knowledge in mind and find a provider that’s a better fit for you.

  1. Map out your financial situation

Chances are that your personal finances have changed since you first signed for your mortgage. You might have received a raise at work, had children, paid tuition or even retired – all of which impact the amount that you can afford to squirrel away towards paying off your home each month. Determining what your financial needs are will allow you to choose a mortgage option that’s right for you.

  1. Determine which of your lifestyle factors could affect your mortgage

Will you be moving in the next few years? Do you foresee yourself receiving a large bonus or inheritance sum in the near future? Is there a chance that you might be able to pay off your mortgage entirely in this term? Considering these types of lifestyle factors will help you choose a mortgage product that suits your needs.

  1. Make a decision that suits your needs

Now’s the time to decide which lender provides the best option for your financial situation and lifestyle! Your mortgage broker can help with that decision. Keep in mind that if you’re switching lenders, some extra documentation will be required by the new lender — such as employment and income.

Planning to renew your mortgage? Give Capital Mortgage a call today at 613-228-3888 to find a broker who can guide you through the process. 

Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

What To Know About Re-Financing Your Mortgage Throughout COVID-19

What To Know About Re-Financing Your Mortgage Throughout COVID-19

The ongoing pandemic has thrown all of us for a loop, with many people either being temporarily laid off, having their salaries cut or being let go altogether. It’s a scary and unprecedented time that is leading a large percentage of Canadians to consider whether they should refinance their mortgages. Doing so will allow them to give themselves a safety net by potentially resetting their rate to be lower, reducing their payments or pulling out equity from their homes in the event of job loss.

Here are a few factors you should keep in mind when planning to refinance your mortgage:

  1. Refinances are not urgent for lenders – Your refinance request will be a third priority (or lower) for lenders after new purchase and lender switches. Coupled with the high demand for refinancing right now, keep in mind that it might take a lender longer to reply on your application.
  2. You may be required to pay a penalty – You’ll have to pay a penalty if you break an existing closed mortgage to refinance. These fees can range from $1,000 to several thousand dollars – check your mortgage contract to determine how your lender will calculate your penalty. Here is a helpful list of penalty calculators by major lenders. 
  3. Employer verification will be strict – Given the situation we’re currently living through, your lender might make you prove that you will not be laid off during the economic shutdown if you don’t work a job that has been deemed to be essential
  4. Fluctuating ratesKeep in mind that mortgage rates are fluctuating often right now, even though the Bank of Canada slashed its overnight rate in March. Make sure you’re not overpaying for a fixed or variable mortgage and consider a cheap shorter term if you’re able to find one. Rates will likely return to normal once we’re through the worst of the pandemic.
  5. Opt for a home equity line of credit – A HELOC is a great alternative to using credit cards for a source of emergency liquidity. Payments are usually interest-only and you can generally borrow at your lender’s prime rate plus a variable of approximately +0.5% to 1%, versus the higher interest rates of credit cards. Note that you’ll need an excellent credit score and stable employment to be approved.

 

Refinancing your home can be a complex decision when considering all of the factors involved. Don’t hesitate to give us a call at 613-228-3888 if you require more clarity on your mortgage’s details, we’d be happy to walk you through it.