You know something big is due when you keep crossing off days on your calendar that get you closer to that big red circle. It sucks when that day isn’t a birthday or special occasion. Instead, it’s the maturity date for your mortgage (i.e. the day your mortgage term ends).
It’s really hard to completely pay off your mortgage in your first mortgage term. Most people are looking to face at least one renewal in their lifetime. Renewing your mortgage is not a bad or scary thing though. So, don’t worry too much about it. All it means is that you will renew the outstanding balance of your mortgage for another term at a new (and hopefully lower) mortgage rate.
Chances are, you’ll probably get a mortgage renewal slip in the mail well before it comes to the circled day on your calendar.
Here are some tips to help you through the process.
Don’t settle: Consider your options
Before signing the slip and sending it back, consider what you want and figure out whether or not your current provider is right for you. Shop around a little and find out what else is available on the market. Renewing your mortgage is the same as signing your contract. You don’t want to sign anything before looking around and weighing in your options.
Reassess your finances and know what you can truly afford
It’s probably been five years since you signed your mortgage contract. In that time, things could have changed a lot. Maybe you got a raise at work or changed careers. Or maybe there’s been an accident or some financial crisis came up. Figure out exactly where you are with your finances before you make any big decisions.
Your financial stability is the most important thing when it comes to owning a house. Make sure you are comfortable with what you have and know exactly what you can afford. Also, plan ahead a little. Depending on where you are now, you can try to glimpse in the future and see how you can save.
Know what you really want in a home
There are so many variants in our lives and things change. Let’s be real here, we don’t always want the same things after a few years. You might have found yourself in that position where you’re questioning what you really want. Maybe your company wants you to move or maybe you’re ready to downsize or just find something different. What you need to ask yourself is if you really are ready to fully invest in your home for the next five years?
One thing hat you could try to do is create a five-year plan and list off everything you want. Put down what you imagine will be in your life and where you see yourself being within that time.