Kelowna BC Real Estate for Sale: How to Renew Your Mortgage?

After exiting the pandemic, Canada’s housing market boomed. With borrowing rates at all-time lows, many buyers had more power than in previous years. This allowed several Canadians to acquire homes that they wouldn’t normally be able to afford. As a result, numerous buyers capitalized on the below-average rates. Fast forward to the present-day market, and interest rates are now at the highest they’ve been in 16 years. For those post-pandemic buyers, their once-affordable properties are starting to feel out of reach. As many homeowners are coming up on the end of their mortgage term, it’s important to know how to renew. In this article, we will be giving you a breakdown of when to renew, what steps to take, and how to make sure your needs are covered.

Follow along below to learn more!

An Overview of Renewing Your Mortgage for Kelowna BC Real Estate for Sale

Before we get into the steps of renewing your mortgage there are a few things to note. On average, most Canadian mortgage terms expire between 1 and 5 years. To continue borrowing from a lender, you must renew your mortgage at the end of this term. Come renewal time, you are given the chance to re-negotiate the terms of your loan, or switch lenders. 

If you choose to swap lenders and borrow from someone else, you will need to requalify! Given the current interest rates, this could be extremely difficult for some borrowers. Sticking with the same lender is often much simpler. However, if you are eager to find someone new, make sure you shop around and do your due diligence.

Taking the First Steps 

Renewing your mortgage should not be taken lightly. Consulting with an expert is never a bad idea to ensure that you are making the best financial decisions for your situation. To help you prepare for the renewal process, we’ve outlined some of the first steps that you should take:

1. Begin the Renewal Process Before Your Term is Up!

Starting the process of renewing your mortgage should happen far in advance of your term ending. This will give you ample time to check out the market, meet with an expert, shop around and review the terms of your current mortgage. It will also allow you time to consider what you’d like to negotiate for your new term. You can begin the renewal process with your lender or mortgage broker usually up to four months in advance. 

2. Have a Good Understanding of Your Current Mortgage Terms

Before you renew, make sure that you take the time to review the terms of your current mortgage. This means assessing your present interest rate, determining the remaining balance, understanding your repayment schedule, and seeing if any fees or penalties come with terminating your mortgage early. At this point, you should also evaluate your financial goals and think about what terms you’d like to re-negotiate to help you attain them. 

3. Compare Rates and Review the Market

As you work through the renewal process, it’s important to always check the current market conditions and see what experts are predicting. This will help you make more informed decisions about your lending options. Another important task to consider is getting comparable rates. See what competing lenders are offering and use this information to help negotiate a better rate for yourself or switch to a new broker. 

Negotiate and Review

4. Negotiate for the Best Terms

Once you are ready to finalize the renewal process, it is important to negotiate the best terms and rates for your agreement. Before you start the negotiation, make sure you have a clear idea of what you want to change. If your lender is not budging on your terms, consider switching to someone new. However, if you go this route, make sure you shop around and factor in the requalification process. The last thing you want is to be left without a lender and be forced to sell your home. 

5. Review Your New Agreement

When all is said and done, don’t sign your new agreement until you are happy with the terms. At the very minimum, you should carefully read through your agreement and make sure that everything is correct. For example, checking the interest rate, payment schedule, and term duration to ensure that there are no surprises. 

Contact us Today About Kelowna BC Real Estate for Sale!

If your mortgage renewal is coming up soon, don’t wait until it’s too late! For more information about buying/selling Kelowna BC real estate for sale, contact us today! We’d be happy to help you find an amazing home that accommodates you and your family’s needs! We work with a closely vetted list of home-buying and selling professionals. If you need a mortgage broker, home inspector, or financial advisor please get in touch with us today to learn more about our connections in the Kelowna real estate scene.

Be sure to check out our social media for the latest updates and more. And, stay tuned to our blog for more real estate-related information. We look forward to working with you!