How to Transfer Your Mortgage
This article will look at why you should give your mortgage the attention it deserves and how the mortgage transfer process works.
Giving Your Mortgage the Attention That It Deserves
Your mortgage is coming up for renewal. What do you do? If you’re like 1 in 4 Canadians, you might sign the mortgage renewal papers without a second thought. This is a huge mistake.
I get it. You’re busy. We all are. However, your mortgage is most likely the single biggest debt of your lifetime. Don’t you think you should give it the attention it deserves?
We spend days planning a family vacation and a new car purchase, but for some reason, we aren’t willing to put in the time or effort to shop around for our mortgage.
You are leaving hundreds or even thousands of dollars on the table by not taking the time to see what else is out there.
How Mortgage Transfers Work
When your mortgage comes up for renewal, you have two main options. You can stay with your existing lender or move to a new lender.
Many Canadians decide to stay with their existing lender because they believe it will be a lot of work to move to a new lender when that isn’t the case. Moving to a new lender couldn’t be any simpler. It can be done in as little as a couple of hours.
Your mortgage expert will ask for a few basic documents, such as a letter of employment, most recent payslip, mortgage statement and property tax bill. And that’s about it. You often won’t even need to get a new appraisal on your home. The lender may be able to confirm your home’s value using an auto valuation model or desktop appraisal, whereby it doesn’t need to visit your property.
Usually, there isn’t a cost in moving mortgage lenders. The new lender will almost always cover those costs.
Moving your mortgage takes about a month. That being said, it’s a good idea to reach out to our mortgage experts 3-4 months ahead of your mortgage renewal date. That’s because our mortgage experts can secure you a rate hold with most lenders for up to 120 days.
A rate hold is advantageous because you’ve locked in a lower rate if rates go up. However, most lenders have a rate drop policy if rates go down, so you’ll get the lower rate. It’s a win-win situation.
Transfer vs. Refinance
It’s important not to get the two mixed up. Transferring your mortgage is when you leave it as is. You’re not asking for a higher mortgage amount, you’re not extending the amortization, etc. If you want to do any of those things, it should be done as a refinance, not a transfer. The benefit of doing it as a transfer is that you almost always get lower mortgage rates than a refinance.
The one exception is if you’ve made extra payments on your mortgage. If you’ve done that, most lenders let you extend your mortgage’s amortization period back to its original one had you not made prepayments when doing a transfer.
The Bottom Line
Is your mortgage coming up for renewal? Speak to our mortgage experts today for a helping hand in transferring your mortgage to a new lender and put yourself in a better financial position.