Rules for Renewing Mortgage in Toronto
20 July, 2012 / by Bryan Jaskolka
Those who are currently, or are about to, renew their mortgage in Toronto are doing so at one of the most opportunistic times. With interest rates at historic lows, homeowners are now getting rates that are much less than the rates they obtained when they first applied for their mortgage. But what are the rules for renewing your mortgage?
Back in March the Office of the Superintendent of Financial Institutions (OSFI) proposed new rules for renewing a mortgage. These rules were extremely tight, and would have made it extremely difficult for anyone who had to renew in the country. Should these new rules have been imposed, homeowners would need to qualify all over for their mortgage. This would mean that they would need to have a good payment history with their current mortgage, they’d have to have a good credit history, and meet any other requirements that the lender had in place for the mortgages they offer. When the new rules were imposed, an outcry arose, from Toronto mortgage brokers and brokers from all around the country. Lenders weren’t that happy either, as they saw the possibility of their profits sink; and homeowners certainly weren’t happy – especially if their credit had slipped since first applying for their mortgage.
But, those brokers, lenders, and homeowners all breathed a collective sigh of relief when that rule was never actually imposed. Now, all homeowners really need to renew their mortgage is a good payment history on their mortgage – something they’ve always needed to have. If you have missed one payment on your first mortgage, it might be a bit harder to find a lender that will renew your mortgage. If you’ve missed even more than that, it’s going to become much more difficult. If however, a homeowner has always made their mortgage payments on time and has never run into trouble with it, they should have no problem renewing their mortgage.
But that doesn’t mean that you don’t have to do anything if you’re renewing your mortgage. Homeowners don’t have to remain with their original lender, and they might find that they’ll get a better deal going elsewhere, especially if they’ve always been on time in their payments. Rather than going from lender to lender yourself, speak to a mortgage broker when it’s time to renew. Not only can you get a better mortgage package, but you’ll also have access to more lenders than just the major ones – something you may not have if you go it on your own.