Mortgage Crisis
A wise broker friend of mine once told me there is no such thing as a mortgage emergency. I think this may depend on whose perspective this is. I’ve thought about her statement over the years. I think what constitutes a mortgage emergency really depends which end of the transaction you are on.
One situation I run into regularly is clients who have left dealing with their mortgage renewal until the bitter end. This doesn’t necessarily constitute a mortgage emergency if you are not planning to make any changes to your mortgage and you intend to stay with the same lender.
However, if you are in a private mortgage that was intended to be a short-term solution leaving your renewal until the bitter end can put you in a precarious position. Not all private lenders automatically offer renewals. Some charge a significant fee to renew for another term. Some will renew but dramatically increase your rate.
If your plan was to move to a traditional lender once your private mortgage comes up for renewal this process can take weeks and in some case months. Depending on your situation a refinance to pay out your private mortgage can be very challenging right now with stricter qualifying guidelines and higher interest rates.
Sometimes clients are proactive with their plan to move from a private mortgage and we run into problems and additional document requests from the new lender or challenges like delays in getting appraisals done.
Whether you are in a private mortgage or your mortgage is with a traditional lender I suggest you start looking into renewal options about six months ahead of your maturity (renewal) date. We can lock down an interest rate hold for you four months ahead of your maturity date but I love to have a conversation with my clients about six months prior so we can develop a plan as to how we will handle their upcoming renewal.
Not all lenders offer an open mortgage at renewal so if you dawdle too long you may end up locked in with your current lender for a bit longer.
If you have left your mortgage renewal until it is right around the corner don’t panic. Many lenders do offer an open mortgage so you can opt for this to buy yourself some time if you are planning to make any changes to your mortgage.
Take some time to evaluate your options. Small tweaks can potentially make a significant difference to your bottom line so it is key to work with a professional that has your best interests at heart.

