Mortgage renewal time sneaking up on you? Don’t leave money on the table. Before you simply sign on the dotted line with your current lender, it’s important to take a good look at your financial health. Is your current lender the best option or can you get a better rate from someone else? Do you have some extra cash to add to your mortgage payment? Would you benefit from a shorter mortgage term?

There are a lot of things to consider but assessing your financial health and making plans for the future can be a game changer. This checkup can help you snag better mortgage terms, save you money, or even decide whether or not refinancing is the way to go. To get you started, let’s look at the essential steps to go through before renewing your mortgage so that you’ll be well prepared when the time comes.

Your Pre-Mortgage Renewal Financial Checklist

Whether you work with a mortgage broker, a financial analyst or planner, or tick these boxes yourself, these are the things you need to take into account.

Review Your Income 

Calculate your current monthly income. Note any changes since your last mortgage agreement (raises, new jobs, etc.). Consider any expected future changes in income (ie. new child, post secondary expenses, big ticket items you need to replace, expected bonuses at work)

Examine Your Expenses 

List all your monthly expenses (utilities, groceries, insurance, etc.). Identify areas where you might be overspending and figure out how you can save then calculate your debt-to-income ratio.

Check Your Credit Score

Request a free credit report from either TransUnion or Equifax. Review it for any errors and dispute them if necessary and note your current credit score.

Evaluate Your Home’s Equity

Research the current market value of your home (usually a realtor will do this for you for free or you can see what similar homes near you have sold for). You want to calculate how much equity you’ve built up to date and note that for reference.

Assess Your Long-Term Financial Goals 

Review your retirement savings plan and how much time you have to save to reach your goal. Consider any major upcoming expenses (education, renovations, etc.). Determine if you want to pay off your mortgage faster or if you’d rather enjoy some extra cash on hand.

Research Current Mortgage Rates

Review current mortgage rates in your area (you can check Barrie’s rates on my website). Check rates from various banks and credit unions or talk to a mortgage broker like myself who will do this for you. Compare these with your current rate to get a handle on what kind of increases you might expect moving forward.

Consider Your Job Stability

Reflect on your job security or the employment of your partner. Think about potential career changes in the near future. Is there a raise or bonus on the horizon or is your company downsizing?

Review Your Current Mortgage Terms

Note your current interest rate, your mortgage options (open or closed), and your amortization period. Understand your prepayment privilege and ask yourself if paying off some of your mortgage is a possibility before you renew. Check for any penalties for switching lenders and factor that expense into the mix. They should be listed in your mortgage contract.

Calculate Your Risk Tolerance

Decide between going ahead with a fixed or variable rate. Do you like the security and lower rates of a fixed mortgage or are you comfortable taking a chance on changing mortgage rates? Consider how interest rate changes might affect your budget long-term before making your decision final.

Consult With a Professional Mortgage Broker

This all may seem very complicated but you don’t have to go it alone. Schedule a meeting with me, your trusted mortgage broker, or a financial advisor, and let them show you the ways you can save on your mortgage renewal. It’s not all increases, you could be overlooking something. 

Are You Ready to Renew Your Mortgage? Make Sure You’ve Ticked All The Boxes

By working through this checklist, you’ll have a basic view of your financial situation that will allow you to make informed decisions about your mortgage renewal. Maybe you’ll discover you’re in a position to negotiate better terms, or perhaps you’ll realize it’s time to shop around for a new lender.

Remember, your mortgage is likely your biggest financial commitment. Taking the time to assess your situation before renewal can potentially save you thousands of dollars over the lifespan of your mortgage loan. It’s also important to not to rush the process – your future self will thank you for the careful consideration you put in today.

Don’t Leave Money On The Table When You Renew Your Mortgage. Let Me Help You Find The Best Option

If all this financial talk makes your head spin, don’t hesitate to reach out to me to ensure you’re making the best decision for your unique situation. I have expertise as a mortgage broker and a financial advisor and I know the Barrie market well. Take the time to consider all your options before you renew so your financial future is secure. Call me today at 705-315-0516, or book a consultation online. I’m happy to help you figure everything out.