Advice for Those Renewing Their Mortgage in the Next 6 Months

If your mortgage is renewing in the next 6 months, you’ll want to be proactive to avoid higher interest rates and any other challenges that could come up. 

Here are some tips from a highly experienced mortgage team. Although it’s a long list, I’d encourage you to read through it as there may be something that you haven’t considered. Be proactive about your upcoming renewal and contact us early so you can win at the mortgage game!  

Have you explored all your options?

Don’t wait for your existing financial institution to contact you. They often wait until the last minute, and you may not have time to explore other alternatives if you’re not happy with the rate or terms. By being proactive, we can help you look for opportunities that could better meet your needs right now. We recommend anyone coming up for renewal in the next 6-8 months, contact us this week to book an appointment!

Are you comfortable with your payments?

If you’ve been feeling financially strapped each month, your mortgage renewal at a higher rate will exacerbate the problem. Some solutions to this problem would be to look at lengthening the amortization period for a few years now and then using the pre-payment on the mortgage to pay down on your mortgage principal when you have some extra cash. Making your mortgage payments during a time of inflation can be challenging, this could be the time to reduce the payment amount to a more easily managed level.  

Do you need cash flow for other things?

Your priorities may have shifted since you first bought your home, and your cash flow needs can shift too. Things like paying for a child’s university education, planning a career change, or a major purchase such as a vacation property may call for spending money on things other than your home. You may be able to refinance your mortgage, take out equity to pay for these additional investments.   

Can you handle fluctuating rates?

Some homeowners are nervous about any hikes in interest rates, while others are comfortable to go with the flow. Rates are tough to predict. It’s best to base your decision on your personal situation, not what you read in the news, and tailor your mortgage renewal around your needs. We can help you decide whether to opt for fixed or variable rates – and we don’t want you to lose any sleep over your decision. 

Will you sell soon?

If you are likely to sell soon, but waiting to see what happens with the real estate market, consider a shorter-term mortgage or one that has flexible terms, so you’re not penalized if you sell your house before the mortgage comes due.   

Are you thinking about a major renovation? 

Projects such as a new kitchen or an addition can make your home more valuable. But the cost of having the work done can tie up a lot of money. Most general contractors are estimating a cost per square foot starting at $110 in 2022. Before you renew, look at all your financing options, which may include getting an additional line of credit or keeping your monthly mortgage payments low so you have money on hand to finance the renovations. 

When do you want to be “mortgage-free”? 

If you’re planning extended time away from work or perhaps an early retirement, it may make sense to pay down your mortgage sooner rather than later. While increasing your payments will raise your monthly costs now, you’ll ultimately save on interest in the long term and can prepare for that fabulous, mortgage-free lifestyle. 

Could you use your home equity to fulfill other goals?

Refinancing a mortgage can be one way to free up cash you need for other things, which could even include buying another property. Mortgage renewal time is an ideal occasion to review all your options. 

 Have your insurance needs changed?

If your financial situation has changed since you first took out your mortgage, review whether you need the same level of insurance in place to cover mortgage obligations.   

 Are you getting the best rates and terms?

In a competitive mortgage environment, your good credit history can make refinancing work to your advantage. We analyze mortgage markets daily to ensure you don’t miss any money-saving opportunities.