Dominion Mortgage Pros

When it comes to owning a home in Edmonton

one of the most crucial aspects to consider is your mortgage—the heart of your home financing. At Dominion Mortgage Pros, we understand that dealing with mortgage renewals, especially during times of rising interest rates, can feel daunting. But don’t worry; we’re here to help you navigate through it.

Understanding Mortgage Renewals

When your mortgage term comes to an end—typically 1 to 5 years—you’ll have the option to renew it. This means you can either stay with your existing lender or shop around for a new mortgage provider. The great news is that being proactive during this process can save you money, especially when interest rates are on the upswing.

In fact, according to the Canadian Mortgage and Housing Corporation (CMHC), around 40% of homeowners in Canada do not shop around for a better rate during renewal. This number can leave money on the table for you, especially in an ever-changing market.

What’s Happening with Interest Rates?

As of late 2023, we’ve seen fluctuations in interest rates, making it essential to stay abreast of the current trends. The Bank of Canada has been gradually increasing rates to combat inflation, and even though some forecasts indicate potential stabilization, the uncertainty remains. Your mortgage renewal timing can greatly affect how much you’ll pay over the life of your loan.

Pre-Approval: A Smart Move

Before going into the renewal process, it’s wise to get pre-approved. This can give you a clearer picture of your borrowing potential and the types of rates that are currently available. Dominion Mortgage Pros can help set you up for this by evaluating your financial situation and credit score.

• A pre-approved mortgage can give you access to better rates, as you have the ability to lock in a rate for a set period.
• With rates constantly fluctuating, securing a low rate before the renewal date can provide peace of mind.

Consider Your Current Lender vs. New Lender

When it’s time to renew, you’ll need to decide if you want to stay with your current lender or explore new options.

• Staying with Your Lender: Sometimes it’s easier to stick with what you know. Your current mortgage provider may offer you a loyalty discount or incentive to renew with them.
• Shopping Around: On the flip side, seeing what other lenders are offering can be beneficial. If you’re curious about your options, Dominion Mortgage Pros can help you compare rates, terms, and conditions from different institutions.

Understand Your Mortgage Terms

Knowing the ins and outs of your mortgage can significantly affect your renewal experience:

• Fixed vs. Variable Rates: Generally, fixed rates offer stability while variable rates typically come with lower payments. If interest rates are rising, locking in a fixed rate may be safer for you.
• Amortization Period: The longer your amortization period, the lower your monthly payments. However, this means you’ll pay more interest over the life of the loan.

Consider Additional Costs

When you start renewal discussions, it’s vital to think beyond just the monthly payments. Some additional costs might include:

• Prepayment Penalties: If you decide to switch lenders before your existing term ends, you might face penalties that can add up.
• High-Ratio Mortgage Insurance: If your down payment was less than 20%, you may be able to take advantage of lower high ratio rates without having to repay the insurance premium.

Ensure All Paperwork is in Order

When entering into a new agreement or renewing, it’s essential to ensure that all your documentation is up-to-date. This includes proof of income, credit reports, and other necessary documentation that may affect the underwriting process.

Mortgage Underwriting: What to Expect

During this stage, the lender closely examines financial details to determine your creditworthiness. This might include:

• Employment Verification: They will want to ensure you’re gainfully employed.
• Debt-to-Income Ratio: This tells your lender how much of your income goes towards current debts.

In Canada, underwriting may take longer during busy periods or if applications are more complex. Engaging with an Edmonton mortgage broker like Dominion Mortgage Pros can simplify this step for you, ensuring a smoother experience.

In Conclusion

Navigating mortgage renewals may seem tricky, especially with the uncertainty surrounding interest rates. However, understanding your options and knowing exactly what to look for can ensure you make informed decisions that lead to substantial savings. At Dominion Mortgage Pros, we welcome the chance to partner with you through this process, giving you the expertise and insights needed to make your mortgage renewal a successful one. Always remember, knowledge is power, and the more informed you are, the more confident you’ll feel in your mortgage decisions.