Borrowers with an existing mortgage or at the end of the term need to consider renewal. A renewal is about revisiting the terms of a current agreement when the initial term ends.
They need to be renewed when the total amount has not been paid off by the end of the term. Adjusted payment schedules and realigning the terms with better interest rates are possible.
The loans that need to be renewed include the common ones, including mortgages, personal, car, business, and student loans.
Mortgage Loan Renewal
Borrowers with an existing mortgage term ending need to look at a loan renewal. Traditional lenders in Canada need to provide a renewal statement 21 days before the term ends. It’s suggested that property and homeowners should start the process 120 days in advance.
Here’s a tip. You should negotiate with your current lender to get a lower rate than the one quoted in the renewal letter. Having offers from other financial institutions or mortgage brokers can help. However, your current lender may want proof of the other offers.
You might choose to switch lenders, but you’ll need to be aware of costs that include discharge, registration and transfer fees.
Personal Loan Renewal
Renewing a personal loan is the right move around the end of the current term or even when a borrower’s financial situation has changed. People taking out one of these loans can be looking at reducing their monthly payments, lowering their interest rate, or even consolidating multiple debts into one payment.
Ensure you understand the difference between a secured and unsecured personal loan when renewing.
Unsecured loans usually require little collateral. Renewal depends upon your financial situation and current credit score. A secured loan requires collateral, like a car or house, to reduce the lender’s risk.
Renewing one of these products involves examining the collateral again. If that asset changes in value, the renewal terms could be different.
Car Loan Renewal
A car loan is another type that you can renew. Refinancing is similar to buying the car in the first place. Make sure that you are in good standing and haven’t defaulted on a lease or missed payments.
This is a fairly straightforward process. There’s no negotiation about the value of the vehicle. However, a person looking to renew a car loan is locked into the cost that’s associated with the original purchase price. The new lender will buy the amount you owe and then lend the money back to you.
Some of the good reasons to refinance one of these loans include removing a cosigner or adding a payee. Refinancing also allows you to extend the terms of the loan and reduce the amount you need to pay monthly. Of course, the interest rate is one of the big reasons to consider a refinance.
To refinance a car loan you’ll need to have the following information.
- Three months worth of pay stubs from your current employer.
- Tax information that can include your most recent records.
- Bring along your banking details.
- Personal identification including a government issued photo ID and passport or driver’s license is required.
Vehicle information is also important including the mileage, model, making year of your car.
Business Loan Renewal
Getting renewed here depends on the business owner’s creditworthiness and the financial health of the enterprise itself. It’s recommended to start the renewal process around 90 days before the business loan maturity date.
The Canada Small Business Financing Program offers some excellent information. Basically, a business loan can be a line of credit provided with certain repayment terms or a lump sum. The small businesses that are eligible operate in Canada and have gross annual revenues of $10 million or under.
The Canada Small Business Financing Loan is a government-guaranteed program. It’s perfect for established businesses who are having cash flow problems and new businesses looking for startup money.
Student Loan Renewal
Eligibility to reduce student loans depends on the terms in the original product and the applicant’s financial situation. When dealing with students, this type of transaction isn’t necessarily a renewal. It involves managing the repayment terms.
Several options include adjusting the payment terms and repayment assistance plans. The National Student Loans Service Centre (NSLCS) is an excellent resource that offers tools like pre-authorized debit (PAD). This tool allows students to make a one-time lump sum payment or increase their monthly amounts. There’s also a Repayment Assistant Plan that can defer payments for up to six months.
Are You Exploring Your Options for a Mortgage Loan Renewal?
Mortgage Broker Store focuses on numerous mortgage-related products. Mortgages that don’t meet traditional lending institution requirements are one of our priorities. Our team includes private lenders, brokers, and licensed mortgage agents. Let us help you prepare for and get a private loan that meets your specific requirements.
Email ron@mortgagebrokerstore.com or call 416-499-2122
