12 January 2011
It’s recommended to start doing it about four months before the end of your mortgage term. Contact your mortgage broker and ask him/her to find a new mortgage with the necessary terms and conditions.
It’s important to understand that if you don’t take measures to find a better mortgage, then your existing mortgage may be automatically renewed for another term with the same lender. In other words, you may not get the best rates – you’ll be locked for another period.
First of all, you have to review your mortgage needs. In order to do that, ask yourself a few questions. Are you sure the services your lender offers you are good enough? Can you afford bigger mortgage payments to pay it off sooner? Do you want to change your payment schedule? Can you make prepayments? Have you thought about consolidating other debts with higher interest rates?
Changing a lender
The deal is that you really don’t have to renew your mortgage with the same lender. Ask your mortgage broker to see if there’s another lender offering you better rates and conditions. Remember, when you refinance with a new mortgage lender, your documentation will be examined as if you are applying for a new mortgage.
Another thing to keep in mind is the cost of this procedure: legal fees for the new mortgage registration, fees to discharge the previous mortgage etc. Here you should ask your broker if the new mortgage lender is going pay all these fees.