What is a mortgage renewal?
When you receive a mortgage from a lender, your mortgage contract is effective for a set amount of time. This is referred to as a mortgage term. A mortgage term can range anywhere from a few months to five years, or even longer.
Why do I have to renew my mortgage?
Your mortgage needs to be renewed at the end of each mortgage term, except in the scenario where you pay off your balance in full. Most homeowners require several mortgage terms to pay off their mortgage completely.
How do I know when it’s time to renew?
If your mortgage contract is with a federally regulated financial institution, such as a bank, the lender is legally required to provide you with a renewal statement a minimum of 21 days before the end of your existing term. Your lender is also required to inform you 21 days before the end of your term – in the event they won’t renew your mortgage. You will receive this information in the form of a renewal statement.
What is a renewal statement?
A renewal statement will include this information and be provided to you by your lender:
- Balance or remaining principal at the renewal date
- Current interest rate
- Payment frequency
- Mortgage term
- Additional charges or fees that may apply
The renewal statement must also state the interest rate offered won’t increase until your renewal date. It is likely that you might receive a mortgage renewal contract at the same time as a renewal statement.
Working with a mortgage specialist can go a long way during your mortgage renewal. A dedicated specialist will evaluate current rates and ensure you find a mortgage product for your renewal that best suits your needs.
It’s also a good idea to review your financial status, needs, and goals with your mortgage professional at this time so they can factor that information in when working with you on your renewal.
Reach out to your Pineapple mortgage professional today to guide you through this process and answer any questions you might have.