First of 2015! RENEWALS!

After taking some time off from blogging I wanted to kick off 2015 by discussing mortgage renewals. Why? Lately I have been receiving a lot of inquires with many renewals coming up and in order to demystify the process I wanted to share my insight.

First, never ever ever take the offer you are given from your lender right off the bat. Most likely they have priced the renewal offer much higher simply because they are aware that many clients do not want to take the time to shop around. YET, shopping around can literally save you thousands in unnecessary interest costs, so it is worth your while to do so. Your lender knows that inherently people are either too busy or nervous at renewal time and therefore are offering rates (today) that are .10 to .30 basis points higher (or more). Although signing a renewal is a very easy process (usually it’s just one single page), shopping around for one is also very easy and here’s why:

First - some lenders offer a no-income switch program. This is only reserved for the types of deals that have had no income change since the last approval, for good credit applicants, and for people who have a high-ratio mortgage (CMHC insured originally). This is the easiest type of renewal to complete as all that is required is just the renewal form, void cheque and photo ID. Simple & easy.

Second - some lenders offer switches for clients who are stuck in a collateral mortgage. Remember, a collateralized mortgage is one that essentially locks you into an agreement with the lender and even at renewal does not allow you to leave without paying a legal refinance cost (as you must de-register the collateral charge). Yikes. That said, some lenders offer a switch…

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