As 2024 unfolds, Canadian homeowners find themselves at a crucial point in their mortgage – renewal time! In this article, I will explore the current dynamics of the Canadian mortgage market, what to expect when renewing your mortgage, and considerations to ensure a seamless process. If there’s a topic that homeowners are discussing in 2024…Read Article
When Should You Start Planning Your Mortgage?
If you’re dreaming of owning your own home, the biggest thing that is holding you back from purchasing is most likely obtaining the funds. You might be questioning when the right time to start planning a mortgage is. Depending on whether it’s a purchase, refinance or renewal, the answer will different.
Owning a home is a big commitment, but one of the best commitments you’ll make in your life. In this article, we’re going to be discussing mortgage tips for when you’re preparing for a home and deciding on a mortgage.
Purchasing a New Home
We’ll start with the most exciting scenario. Purchasing a new home! I’ve written previous articles about various closing costs associated with purchasing a new home. There will always be added costs when it comes to purchasing a home and that’s very important to take into consideration. For a new purchase, planning can start up to two years away if you’re self employed or need to work on your credit.
Some people begin saving for their first home in college or even before! Every person is different and every one has a unique financial situation. Contacting a mortgage broker and discussing your situation and your income vs debt ratio as soon as possible is always the best option. I’ll be able to access where you’re at currently and where you need to be to qualify for a mortgage. Being able to have a number or a plan to start saving for your home can help you make your first step.
For clients who have their down payment ready, good income and great credit, the planning doesn’t have to be as long. You would normally want to start planning your mortgage four months in advance to when you’re hoping to purchase.
It’s always good to start the planning with more than enough time. Things happen, banks are busy, you may end up spending more time negotiating with the seller of the home you’re hoping to buy. Nonetheless, giving yourself more time will help release any stress that comes with closing on a new home.
Mortgage Renewal vs Refinance
Refinancing Your Home
Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many different reasons why a homeowner would refinance, including:
- a lower interest rate
- a shorter term for the mortgage
- to change from a variable rate mortgage to a fixed rate
- to finance a renovation
- to consolidate debt
If you’re hoping to refinance, planning for this can be anywhere within two to three months. If you are self-employed, it will most likely take longer than three months, depending on your income and your job. The same as with a new purchase, I’d recommend reaching out to a mortgage broker as soon as possible.
Refinancing can be a great financial move if it’s the correct one for your situation. Contact me today to chat through whether or not we should start preparing for this.
Renewing Your Mortgage
The time has come to renew your mortgage! I am able to lock in a rate up to 120 days away with a lender. That means I will need to know around three months in advance of your renewal time period. Since I’m a mortgage broker and I don’t work at a bank, I’m able to review a number of bank’s rates. If you went to your personal banking bank, you’d just have the one rate. The biggest advantage in hiring a mortgage broker is that I am able to shop around for the best rates for you.
This takes a bit more time, but who doesn’t love a good deal? If you didn’t get your mortgage through me at the beginning, that’s not a problem. I am still able to work with you to find you a great rate for your mortgage renewal.
Planning Your Mortgage? Time is of the Essence.
I’ve mentioned this before and I will mention it again! Everything takes time. The sooner we chat about your situation and whether you’re purchasing a new home, refinancing your current one or renewing your mortgage, the sooner we can start the process. And again, if you’re self-employed, it’s best to check in as far in advance as possible in case you need to plan your income to qualify.
Contact me today and I’d be happy to answer any questions you may have in regards to this article and mortgages in general.