What you need to know about your first mortgage renewal:
Congrats! You've made it through your first mortgage term. This means you've got some options available to you that are worth considering.
Your mortgage term is like any other contract - a lease or even a cell phone contract.
When
your mortgage term is up, you have options to renew with the current lender, shop around, refinance, sell, or pay the mortgage off completely without penalty.
Some things to consider before just signing to renew with your current lender:
-How long do I want to live in this property? Your next mortgage term should align with this (for example, in 2 years you are going to sell and purchase a bigger home).
-What do I want to do with the home? If you're planning some renovations, ask about refinancing. You'll need to have had a hefty down payment and enough equity to do this - but you may be able to take the equity out as cash to pay for the renovation. This is much cheaper than using credit cards/lines of credit.
-Is there anyone that needs to be added or removed from the mortgage (such as a co-signer)?
-Qualifying: if you're looking to switch lenders, you'll need to re-qualify. This means your income documents will be required like they were when you initially received the mortgage. This is a little extra paperwork, but the process is worth it if you're saving $$ on interest.