Find a Way Out
If you're feeling trapped by higher rates and stricter qualifications, don't worry. We've got your back when it comes to mortgage renewal.
Don't Wait for the Paint to Dry
The days of ultra-low interest rates are behind us, and it's crucial to find the best rate and options for your mortgage renewal. With today's higher rates, renewing your 5-year fixed mortgage could mean an increase of 2 to 4%. Plus, the stricter stress test may block you from qualifying with another lender.
But fret not! We have solutions to help you save money and avoid being at the mercy of your current lender's renewal rate.
Understanding How Higher Qualifying Rates Can Impact You
At the start of your mortgage term, you qualified for your payments using the federal stress-test rate. Recent rate hikes have pushed that qualification ceiling even higher. Now, lenders must ensure you can afford your payments if rates go up another 2.0%. This higher stress test might prevent your qualification, making it challenging to switch to a better rate or lower payments.
Finding a Way to a Better Rate
Here are some options to help you escape the renewal corner:
Go for the Stretch: If you have built up equity, we can stretch your amortization up to 30 years with our fixed-rate products. This can lower your payments, improving your debt ratios and making it easier to qualify for a mortgage switch. Some fees may apply, but we've got you covered.
In with the Old: If your home was purchased before October 17, 2016, and your mortgage insurance is still valid, you might be able to switch to a lender with us for your renewal using your contract rate to qualify. This bypasses the newer stress-test rules.
Refinance to Lower Payments: Even if you can't make a switch, refinancing with your current lender to extend your amortization to 25 or 30 years can lead to lower payments. Some requirements apply, but it's an option worth exploring.
Put Down a Lump Sum: If you have extra funds, putting down a lump sum on your mortgage at renewal can give you flexibility to extend your mortgage length for lower payments. You can even recast your mortgage for instant lower payments.
Go Short-Term: Consider a shorter-term fixed rate, like 2 or 3 years instead of 5, with flexible pre-payment options. This way, you can pay down your principal before renewal if rates don't cooperate.
Variable vs. Fixed Rate Mortgage
Discuss with me whether sticking with your variable rate or choosing a fixed-rate term is best for you during renewal. Variable rates may offer relief and flexibility without breaking a fixed term.
Empower Yourself with Expert Advice
Understanding your rate and mortgage options, as well as your renewal rights, can empower you during times of economic volatility. Tap into my knowledge base here and know that I am here to help with debt-reduction strategies, money-saving tips, and renewal options to make the most of your mortgage budget.
Don't wait; talk to me today, and let's navigate your mortgage renewal together!
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