Ultimate Guide to Mortgage Renewals in Canada: Tips and Strategies

If you’re a Canadian homeowner approaching the end of your mortgage term, you’re probably gearing up for a mortgage renewal. Understanding this process can significantly impact your financial future. In this comprehensive guide, I’ll delve into mortgage renewals in Canada, covering essential tips and strategies to help you make the best decisions for your situation. Whether you’re a first-time homebuyer or a seasoned homeowner, this post will provide valuable insights into optimizing your mortgage renewal process.

What is a Mortgage Renewal?

A mortgage renewal is the process of extending the term of your existing mortgage once the initial term has expired. In Canada, this typically occurs every 1 to 5 years, depending on the length of your original mortgage term. During this renewal period, you have the opportunity to negotiate new terms with your lender or switch to a new lender altogether.

Key Steps in the Mortgage Renewal Process

1. Review Your Current Mortgage
Before you start the renewal process, take a close look at your existing mortgage terms. Understand your current interest rate, remaining balance, and the time left on your mortgage term. This information will serve as a foundation for negotiating new terms. Its best to begin at your mortgage 120 days in advance of your renewal.

2. Call your mortgage broker to check current interest rates and to run scenarios to ensure you can afford the new proposed payment
Interest rates can vary significantly between lenders. Mortgage brokers have many different lenders rates at their finger tips, ensuring you get the best deal. This is also a good time to run different rate and payment scenarios if you’re feeling a payment crunch, or if you want to pay off your mortgage faster.

3. Evaluate Your Financial Situation with your mortgage broker
Your mortgage broker will ask you to consider your current financial situation and future goals. Are you planning to stay in your home long-term? Do you anticipate significant changes in your income or expenses? These factors will influence whether you should opt for a fixed-rate or variable-rate mortgage and whether a shorter term such as a 2 or 3 year term is more favourable than what most people choose – the 5 year mortgage.

4. Check with your mortgage broker on your mortgage terms and ensure they are as flexible as possible
Understanding the terms of your mortgage and opting for a flexible mortgage is important to your financial health. Knowing whether you have prepayment privileges of 10%, 15% or 20% or none at all is critical. With a closed mortgage, a prepayment penalty is triggered if you exceed the prepayment privileges of your mortgage whether by a small amount or by paying the entire loan off early. It’s important to know what steps you can take to shorten your mortgage amortization and pay less interest over the life of the mortgage if at all possible.
Portability is another benefit of more flexible mortgages. Being able to port your mortgage to another property can avoid a high-cost prepayment penalty which can eat up the equity you have built up in your home.
Having a flexible mortgage is important for most people, as this can give you the piece of mind that should Life happen, your mortgage can happen with you.

5. Finalize the Renewal
Once you’ve chosen the best mortgage renewal terms for your situation, finalize the agreement with your lender. Review all documents carefully before signing to ensure that all terms and conditions are accurately reflected.

Common Mistakes to Avoid
• Not using a mortgage broker or doing the legwork yourself: Failing to secure a mortgage broker to compare offers from multiple lenders can cost you more in the long run.
• Not Understanding Terms: Ensure you fully understand all terms and conditions before committing to a new mortgage agreement.

Wrapping it up
Mortgage renewal in Canada is more than just a formality—it’s a crucial opportunity to reassess your mortgage terms and potentially save money. By carefully reviewing your current mortgage with your mortgage broker, you can make informed decisions that benefit your financial future. Stay proactive and take advantage of this important financial opportunity to secure the best possible mortgage renewal terms.

For personalized advice and assistance, consider calling or emailing me today. I can help you navigate the renewal process and find the best options tailored to your needs. Happy renewing!

Bonnie Casault
Mortgage Broker
780-716-4819
bonniec(at)dominionlending.ca

Navigating Your First Home Purchase in Alberta: A Comprehensive Guide for First-Time Buyers

Embarking on the journey to buy your first home is both exhilarating and a bit daunting. For many first-time homebuyers, the process can feel overwhelming, but with the right information and guidance, it can be a smooth and rewarding experience. Here’s a step-by-step guide to help you navigate the process with confidence and ease.

1. Understanding Your Financial Readiness

Evaluate Your Finances
Before you start house hunting, it’s crucial to assess your financial situation. Review your savings, income, and current debts to determine how much you can afford for a down payment and monthly mortgage payments. Remember, the more you save for a down payment, the lower your mortgage amount and monthly payments will be.

Consider using your RRSP’s as a down payment
In Canada, there’s a program called the Home Buyers’ Plan (HBP), which allows you to withdraw up to $60,000 from your RRSP to use as a down payment.

Check Your Credit Score
Your credit score plays a significant role in securing a mortgage. You can get a free copy of your credit report from Equifax or TransUnion to check your score and confirm the debts reporting are correct. A higher score can help you secure a better interest rate. If you’re unsure whether or not your credit score is acceptable, give me a call and I can answer any questions you may have.

2. Get Pre-Approved for a Mortgage

Why Pre-Approval Matters
Getting pre-approved for a mortgage is an essential step for first-time buyers. It provides a clear picture of how much you can borrow and demonstrates to sellers that you’re a serious buyer. The pre-approval process involves submitting financial documents and undergoing a credit check. While not many lenders provide full underwriting for pre-approvals, I do provide this option through one of the many lenders I work with. Give me a call if you’re interested in getting a full pre-approval before you start house hunting, so you can be confident making an offer on a home.

Choosing the Right Mortgage
By choosing to work with me, I’ll ensure you understand all the various mortgage options, including fixed-rate vs. variable-rate, options for mortgage prepayment, portability etc. A mortgage should be tailored to your specific situation and the financial goals you have for your home and future.

3. Start House Hunting

Define Your Needs and Wants
Create a list of must-have features for your new home, such as location, size, and amenities. Consider future needs as well, like proximity to schools or public transport.

Work with a Real Estate Agent
A knowledgeable real estate agent can be a valuable asset in your home-buying journey. They can help you find homes that meet your criteria, negotiate offers, and navigate the complexities of the real estate market. If you’d like recommendations for a knowledgeable Real Estate Agent, give me a call or shoot me an email and I’d be happy to refer you.

4. Make an Offer and Close the Deal

Making an Offer
Once you find a home you love, your agent will help you make a competitive offer. They’ll guide you through the negotiation process to ensure you get the best deal possible.

Home Inspection and Appraisal
Before finalizing your purchase, it’s wise to have a home inspection done to identify any potential issues with the property. Additionally, your lender might require an appraisal to ensure the home’s value aligns with the loan amount.

Choose a Real Estate Lawyer
When purchasing a new home, a lawyer is required to attend to all the closing details and ensure title is transferred to you accordingly. If you’d like a recommendation on a real estate lawyer, please give me a call or shoot me an email.

Closing the Deal
The closing process involves signing various documents, paying closing costs (which in Alberta is typically around 1.5% of the purchase price of the home), and transferring ownership. Your real estate agent and lawyer will guide you through this final step to ensure everything goes smoothly.

5. Prepare for Moving In

Budget for Moving Costs
Don’t forget to budget for moving expenses, including hiring movers, packing supplies, and utility connections. Proper planning can make your move more efficient and less stressful.

Change of Address
Update your address with relevant institutions, including your bank, employer, and any subscriptions or services you use. This ensures that your mail and important documents are redirected to your new home.

Wrapping-it all up
Buying your first home is an exciting milestone, and with careful planning and the right support, it can be a rewarding experience. By evaluating your finances, getting pre-approved for a mortgage, exploring available programs, and working with knowledgeable professionals, you’ll be well on your way to finding and securing your dream home.

If you have any questions or need personalized assistance, don’t hesitate to reach out to me via phone or email. I’d love to take the guess work out of the mortgage process for you so you can focus on the other steps of the home-buying process.

Happy house hunting! 🏠✨
For more tips and advice on buying your first home, be sure to follow my blog and stay updated on the latest real estate trends and market insights.

Top 7 Reasons to use a Mortgage Broker

1. We’re a one-stop shop.
When you call a Mortgage Broker, it’s like calling 30+ different lenders. Each lender will have several different products in their mortgage lineup, and your Mortgage Broker will sift through hundreds of products at their fingertips to find the best mortgage for your situation, at the best rate available. Simplify your life and choose a Mortgage Broker. Let us do the hard work for you.

2. We’re on your side.
Many Mortgage Brokers prefer to offer clients full representation – which means we act in your best interests during a transaction and advocate on your behalf. Our duties to the lenders we work with is strictly to be honest and exercise reasonable care and skill. We want a client for life. Not just for one transaction. However, not all Mortgage Broker agreements are created equal. Some offer to act as an intermediary between you and the lender, which takes both the clients interests and the lenders interests into account, but they do not advocate on your behalf. It’s important to check your Mortgage Brokers agreement to ensure which type of representation you’re being offered. (I only offer full representation.)

3. We work around the clock for you.
Most Mortgage Brokers have scheduled evening and weekend hours so they can work with your busy schedule. We are much more likely to accommodate clients even in our off hours as well. If you have a question or a concern about your mortgage transaction, call or email us. We’d love to set your mind at ease that we are on it, so you don’t have to worry. Typically, we return phone calls within a few hours if at all possible – even on the weekend.

4. Did I mention we’re paid by the lenders on most transactions?
Lenders offer Mortgage Brokers a commission that’s paid in lieu of paying their sales teams. This basically means…you get a battle-ready warrior on your side, for free! If you need creative financing, such as going with a private lender, this could change, but 90% of clients never pay a cent for your Mortgage Brokers services. Your Mortgage Broker will do everything they can to place you with a lender that doesn’t require you to pay for their services first.

5. We want to see you succeed.
Our clients mean the world to us and we treat them like gold. Like I said before, we want to be there for more than just one transaction. We want to make sure your mortgage works for you every step of the way. If life happens, and you need to refinance, or move to another home, we can discuss all the options available to you to find the best scenario for your long-term future.

6. We have advanced education in mortgages.
If you’re like most people, your home is the largest investment you will make in your lifetime. It’s important to have expert advice so you can choose the best mortgage product for your situation, now and in the future.

7. Less inquiries on your credit report.
Finally, in most cases, we’ll only need to pull your credit once, yet you have access to many different lenders with that one credit pull. That’s a powerful thing.

Call me today to discuss your upcoming purchase, refinance or renewal. I’d be honored to help you with your mortgage.