Monthly Archives: September 2021

If you were to ask experienced mortgage brokers in Ottawa, such as Ottawa Mortgage Services, you will learn that you must renew your mortgage at least once before paying it off. As the term mortgage renewal implies, it is the process of re-evaluating your mortgage’s outstanding balance. And most importantly, it involves renewing it for another term at a new rate, which is hopefully lower than before.

There are instances when people pencil their maturity date onto their calendars to know when their mortgage term ends. However, if you didn’t do the same, you will know it’s time to renew when you receive a renewal slip in the mail from your current mortgage provider.

While you may wait for your mortgage provider to send you your renewal slip, there is a better way of navigating your mortgage renewal process. Read on to learn the top three mortgage renewal tips to help you:

Tip #1: Renew Your Mortgage Early

You might think that you have a few months more before the maturity of your mortgage, so you won’t bother applying for a renewal just yet. However, it will be best if you start to shop around early.

It’s possible to negotiate with your current lender as early as 120 days before your maturity date. The best thing about renewing your mortgage early is that in case you can’t negotiate a better offer from your lender, you have a lot of time to look for a new one. 

Tip #2: Negotiate for a Better Mortgage Rate

Once you receive your mortgage renewal slip, you will have to pay for its convenience. You may no longer have any choice but to do so, and that’s often a tactic used by certain lenders. It would also help you if you knew that mortgage providers only discount their posted rate on a renewal slip with the lowest possible rate. 

Due to these circumstances, it’s best to try negotiating your mortgage renewal to get a lower rate. Don’t be like others who are too afraid to try asking for an adjustment to their payment terms. In case your lender cannot or will not offer you one, you have your choice to shop around and switch providers within your renewal window.

Tip #3: Keep Track of Your Financial Goals

It’s crucial to review your financial goals before you consider signing your mortgage renewal slip and eventually send it back. Doing so will ensure that your current provider offers what you need. 

For instance, if you have a mortgage term of five years now, your renewal slip will likely be fixed for another five years. Good for you if you’ll stay in that property for that amount of time. Otherwise, you may consider looking for a mortgage term that is a three-year fixed rate instead.

Final Thoughts

It’s easy to renew a mortgage with your current lender, but signing a renewal slip and sending it back may not be the best option for you. If you consider following these three tips at mortgage renewal time, you may be able to make better choices and get a better deal.

If you need help with your mortgage decisions, get the best lender like the Ottawa Mortgage Services that offers the best mortgage refinance rates in Ottawa. We provide mortgage agent services for first-time homebuyers, commercial agents, and self-employed individuals. Contact our experts today for all of your needs!

Are you researching mortgage options for your dream home? You’ve most likely come across many different choices, including four- or five-year fixed mortgages. Five-year rates are currently more competitive than ever, but shorter-term rates are making a comeback, with some really attractive bargains. To attract attention, some lenders may offer a 3 or 4-year special rate that is lower than the 5-year fixed rate.

The lowest pricing attracts a lot of future homeowners. However, getting the lowest rate for a certain period does not always mean you will be getting the cheapest mortgage. If that were the case, 100 percent of those looking for a mortgage would pick variables over fixed since the rate is cheaper.

If you’re not sure which mortgage is right for you, this article will walk you through the many factors to consider.

Changes in Rates

Rates are presently at record lows because of the COVID-19 pandemic. Today’s 3.34 percent on a 5-year fixed rate was deemed a terrific deal in the summer of 2018. There’s a good chance that rates will rise from where they are now. However, we can’t anticipate pandemic rates to continue indefinitely.

By opting for a shorter term, you are foregoing one to two years of assured low rate protection in exchange for a slightly cheaper short-term rate. The cheaper rate may appear to be a good option right now, but it might wind up being a pricey move depending on where rates are at renewal time.

Your Own Needs

Another question is how long you believe the new mortgage will be enough for your needs. Many people believe they won’t need another mortgage for at least another five years, but things can and do change. If rates were to decrease significantly, consumers could desire to break early. Unfortunately, some people may be forced to refinance or sell ahead of schedule.

Comparisons

Let’s assume you had a choice between a 1.79 percent 5-year fixed rate and a 1.64 percent 4-year fixed rate. In this example, the break-even rate is 2.48 percent, which implies that the 1 year fixed rate upon renewal, to round out the 5 years, would have to be less than 2.48 percent for the shorter term mortgage to be the less expensive choice. If the rates were higher, you would have been better off going with the five-year fixed option.

Your Current Situation

Everyone’s circumstance is different. Many people will tell you to always go variable or always go fixed, but it doesn’t always mean either one is the best option for you. People will give advice depending on their personal circumstances, risk tolerance, and so forth. It’s what they believe is best for them, so they automatically assume it’s best for others. 

Because each circumstance is unique, the perfect mortgage may change from one individual to the next. It will always be adapted to their specific requirements and objectives.

Conclusion

There was a period when shorter-term mortgages had cheaper interest rates than longer-term loans. The lowest prices in recent years, however, were nearly invariably for 5-year terms. As a result, demand for shorter-term mortgages has virtually vanished.

When looking at mortgage rates, most individuals choose for 5-year periods because they are the most common. This isn’t to say that a five-year loan is suitable for everyone; in certain situations, a shorter loan makes more sense. It will all be determined by your own requirements, preferences, and financial resources. You may always get advice from a mortgage professional to determine which choice is best for you.

Are you a first-time home buyer in Ottawa? Well, Ottawa Mortgage Services can help you. We provide mortgage agent services for first-time homebuyers, self-employed individuals, and commercial clients. We also help with refinancing, pre-approvals, and debt consolidation. Talk to us now.

When looking to buy a home quickly, the smart thing to do is to get a preapproved letter from a mortgage lender. To the seller, this means that you are serious about the purchase, causing them to take you a lot more seriously. This is a great advantage to have, especially if other buyers are competing with you. In the end, it can be the difference between securing a home or walking away empty-handed.

That being said, we want to talk more about preapproved letters—why it’s so important, how long it will take to get one, and more.

Why Are Preapproved Letters Important?

As mentioned in the introduction, a preapproved mortgage letter is essential simply because it proves you have gone and looked through your finances. To the seller, this means that you are serious about the purchase and have figured out that you can buy the home. This is a big benefit to you, especially against another buyer that has yet to have a mortgage letter to show to the seller.

How Long Does It Take To Get a Preapproved Letter?

If you initially thought that a preapproved letter takes weeks to get, you’re mistaken. Online inquiries typically take only a few minutes to complete, and you might find yourself waiting for approximately a week to get your letter. However, if you are lucky, you might just get a response within the same day!

Regardless of how long it takes, you should be applying for a preapproval mortgage letter as soon as possible. This way, you can get the letter needed to secure the home you are interested in buying a lot earlier.

What Happens If the Preapproved Amount Is More than the Home Price?

Sometimes, there’s a chance that you might be preapproved for more than you need to buy a home. While there is certainly nothing wrong with this, be wary that the seller might try and take advantage of that amount. If you want to fix the amount, you can contact the lender to readjust the letter amount.

How Can I Make Sure That the Preapproved Amount Aligns with My Budget?

One worry you might have is paying more for a large preapproved amount that you may not necessarily need. To ensure that the amount stated on the letter isn’t the maximum amount you’re eligible for but the amount you’re comfortable paying, work closely with the lender. This way, you can strike a balance between how much you qualify for and how much you are willing to pay.

Conclusion

Simply put, if you are looking to buy a house, do yourself a favour and get preapproved for a mortgage. This way, not only do you know that you qualify for a mortgage when you do want to buy a home, but you can realize how much you qualify for to help you pick the suitable homes that fit your budget. That said, always spend the time to look for professional and trustworthy lenders to work with and compare different mortgages against each other. In doing so, you stand a higher chance of being qualified for the right mortgage that helps to purchase your home and save as much money as possible.

Ottawa Mortgage Services provides mortgage agent services to help first-time homebuyers, commercial clients, and self-employed individuals get the mortgage solutions they need and more. Apply with us today and get the mortgage you need!

Getting a mortgage for your home may be as simple as providing a pay stub and a job letter as two forms of requirements. Sure, there are other prerequisites right after that, but the laundry list of requirements for the typical employee is usually accessible and easy to accomplish. However, there is a different story when it comes to self-employed Canadians.

They will have to go through stricter measures to prove that they can pay the mortgage amount monthly. They will need to show their credentials and various validations to show that they are not a scammer hoping to get an easy score over the mortgage agent.

With that said, there are quite a few ways for you to prove that you are serious about the mortgage and that your stature of being self-employed will not affect your ability to pay on time. The following tips may just help you out in the long run:

1. Do Your Best to Improve Your Credit Score

Even with the roadblock of being a self-employed home buyer, you are still allowed to prove yourself through your credit scores. The thing about credit scores is that they will mainly reflect the habits and attitudes of the borrower. If you have a high credit score, it will say so much about your character as a person who never sleeps until they pay off all their debt, and neither are they lazy or laid back when it comes to their financial obligations. 

Think about it, who do you think the lender will most likely vouch for? Is it the person who has a high credit score but has no definite corporate employer? Or is it the person that is traditionally employed yet, has a bad credit score that will scare off many lenders by nature?

2. Save All of Your Tax Records

A person who pays off all their taxes is trustworthy in all regards. While taxes can be challenging to work with, they offer the best for you to get in the good graces of lenders, especially if you are self-employed. If you have no debt with other lenders and the government, you will be able to prove that you can regularly pay without any form of hassle. 

Government-implemented taxes tend to increase prices in one way or the other. If you can show the lender that you had no problem paying for that consistently, they may be impressed with your determination and attitude towards paying.

3. Establish Your Own Venture Well

Being self-employed has its perks, but it also means that you should handle all your transactions appropriately. You must not run your business to the ground—otherwise, it may give off a negative impression of you. 

If the lender sees your motivation and leadership firsthand through your business records and sales figures, they will have no problem approving your mortgage on the spot.

Conclusion

These mortgage tips will not only improve your chances of getting a good mortgage amount but may also break the stereotype when it comes to self-employed home buyers. People who aren’t traditionally employed don’t always equate to people with common financial problems. 

Some of today’s most successful entrepreneurs started small, pushing their businesses towards success with the right attitude and determination. If you can showcase that, along with the other tips that we’ve given above, you may very well be on your way to getting that well-needed mortgage approval.

If you are looking for a well-trusted mortgage agent in Ottawa to handle your mortgage application for you, look no further than Ottawa Mortgage Services. We also specialize in refinancing, pre-approvals, and debt consolidation, among other things. Contact us today and let us discuss your financial options.