June 6, 2020
What to Expect During the Mortgage Renewal Process
Borrowers
The maturity date of your mortgage is fast approaching. The maturity of your mortgage gives you an opportunity to review your financial situation and make some decisions based on your financial goals and current situation.
If you discussed an exit strategy with your mortgage broker, you may be preparing to refinance with a new lender at a lower rate. If it suits your needs to renew your current mortgage, here are a few things to keep in mind both before and during the process:
Here are some tips to prepare for your renewal:
1. Ensure your account is current: If your mortgage account has fallen behind, make arrangements to bring it back into good standing. Work with your lender to find a solution that suits everyone. Small changes, such as moving your monthly payment to a new day, can make a difference.
2. Keep your home insurance in good standing: If your insurer has changed since you originally obtained your mortgage, make sure you let your lender know!
3. Keep the home in a good state of repair with no deferred maintenance: Don’t put off those home maintenance projects, big or small. Touch up the paint. Mow the lawn. Make sure the roof, furnace, and electrical wiring are in good repair.
What to expect at renewal:
1. Renewal Options: Your renewal options will be sent to you in advance of the maturity date. Review the options you have been offered. You may wish to discuss your options with your bank or mortgage broker.
2. ‘Business-for-Self’ Income: If you are ‘business for self’ or have ownership in a business, you may be asked to provide confirmation that HST and Source Deductions are being remitted to Revenue Canada.
3. Second Mortgages: If you have a second mortgage you may be asked to provide a current first mortgage statement. Most lenders will either send these out annually, or provide a way for you to access the information on their website or via online banking.
4. Income Verification: You may be asked for updated income verification. Gather or print your two most recent pay stubs, just in case you need them.
5. Appraisals: You may be asked for a new home appraisal. Appraisals always make note of any instances of deferred maintenance that are noted during the inspection. This is why keeping on top of projects around your home is so important.
Following these tips can ensure your mortgage renewal goes as smoothly as possible.
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About Magenta Capital Corporation
Magenta is one of Canada’s leading residential, private MICs. Since 1994, we’ve specialized in flexible mortgage solutions for Ontarians who fall just outside of bank lending criteria, while delivering on strong, consistent returns for shareholders across Canada. Our goal is to empower our customers, partners and employees to build a better tomorrow.
For more information, call us at 888-267-1744 or visit www.magentacapital.ca.
