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Having a mortgage means having options. As a mortgage approaches its expiration date, homeowners must decide whether they want to refinance their mortgage under new terms or renew under existing ones.

It’s important to know the difference between renewing and refinancing to determine the best course of action for your situation.

What is a mortgage renewal?

Renewing your mortgage is a straightforward process. If you owe money to the lender after your mortgage expires then you can simply opt to renew. Every term you negotiated and agreed to will remain in effect. All you have to do is sign on the dotted line.

What does it mean to refinance your mortgage?

If the idea of revamped mortgage terms appeal to you, then the option of refinancing is most likely a good fit. Refinancing allows you to gauge the different interest rates and amortization options that might be available to you.

Essentially, a refinanced mortgage is a completely different deal than your original mortgage. You don’t have to wait until the length of your mortgage expires. You can refinance at any time.

Refinancing can be appealing

Refinancing is a proven way to take advantage of lower interest rates. Refinancing can also be part of your strategy to pay off other debts, typically ones with higher interest rates like pay off credit cards debt.

A mortgage needs to fit into your finances and it doesn’t have to be a hindrance. One of the reasons a mortgage is fixed to a certain amount of years is to give both lenders and borrowers the flexibility to make it work.

A renewal date is an opportunity

As your renewal date approaches, you should audit your finances to review how they have changed from when you were first approved. If things are drastically different—you now earn more income, you have paid down a significant portion of your debt—than your mortgage should reflect that.

It’s all about securing the mortgage that is right for you. One that will help you maintain your lifestyle and pay off any necessary debts.

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Personal debt can weigh on a person. It can take an emotional toll and affect someone’s relationships, job or their ability to buy a home or a car. Underlying the negative impact of debt is the tanking of your credit rating.

You don’t need good credit to fix your debt problem. While every situation is equipped with its own set of challenges, debt consolidation is a solution that can help many people. It can straighten out finances, reduce monthly costs and can help someone regain control over their life.

Here are some tips for consolidating debt:

Find the root of the problem

Are you living beyond your means? Are you paying off the debt with the lowest interest rate? Do you need to downgrade your home? Most people might be surprised to learn where their debt stems from and that there might be some obvious ways that one could tackle the problem.

It takes an honest approach to understand what is fueling your debt.

Research your different options

With debt consolidation, there’s no one size fits all. You need to understand all your options. Transferring debt or securing a loan are just two of the options. In certain cases, you could even opt for a debt settlement.

Whatever option you chose, the best course of action is to create a debt management plan. This plan can be crafted by a credit counselor or debt expert or it can be an agreement between you and your creditors that outlines the repayment plan in exchange for lower interest rates.

Avoid the usual traps

Without knowledge or a plan, you could thwart your efforts for a debt-free life instead of enabling it.

Two of the more common traps are not prioritizing the debt with the highest interest rate or consolidating debt with low-interest rates with ones with higher interest rates. You don’t want to pay a credit card interest rate for your student loan.

None of this matters if you aren’t working with a true debt professional. Choose the right partner who can help you draft a realistic plan that will get you out of debt with as little disruption to your life as possible.

Mortgage lending is a business where the lender gets the opportunity to help people get into their dream home, secure their financial future or relieve themselves of the stress of debt. It’s an enormous responsibility and one that shouldn’t be taken lightly.

Applying a common sense approach to lending ensures that our clients are protected and that the relationship is mutually beneficial for the long-term. While lending is a complicated business, a simple and logical approach can result in successful lending and borrowing.

Who is Canadalend?

Canadalend is an experienced, friendly and full-service lender that is committed to helping their clients with all their mortgage needs, debt issues and situations involving financing and refinancing.

Canadalend is not a bank or a traditional lender but we have the experience and knowledge to manage just about any financial situation that falls under our expansive service offering. We offer a personalized service in the areas of:

• Home equity loans
• First, second and third mortgages
• Debt reduction and consolidation
• Renewals and refinancing
• Working with self-employed individuals

Our Approach

Lending should always be a business built and operated on a foundation of common-sense. We work with our clients to help them financially, both in the present and with an eye towards the future, through a process of honesty, integrity and by leveraging our expertise for their benefit.

Our common sense approach includes:

• Offering competitive rates
• Providing counsel for qualifications
• Providing flexible options
• Create strategies to help clients lower their mortgage and debt
• Provide useful cash flow options
• Offer variable rate mortgages, capped variable rates and cash back mortgages

Above all else, we will work with clients who traditional lenders typically refer to as weak investments.

Meeting your Needs

A common sense approach allows us to view applications differently and work towards finding appropriate solutions, designed to meet your needs. We view every application independently and with a unique perspective.

We often hear from our clients that dealing with Canadalend’s brokers and financial experts is a refreshing experience that produces desirable results.

Contact us today to learn more about our common-sense approach and the services we offer.

Canada’s housing market is vital to the national economy. To secure its health, all levels of Government must monitor the market and proactively step in when the warning signs become clear. In major cities, strong housing usually means strong employment rates and other signs of prosperity.

Only a few months ago, banks were urging the Federal Government to intervene in Toronto and Vancouver’s housing markets to offset the price increases from earlier in the year.

Government involvement

To stabilize or stimulate the housing market, Governments can implement several action plans or items:

• Offer subsidies to homeowners.
• Work with the Bank of Canada to lower interest rates.
• Raise the amount that someone can deduct from a RRSP to put towards down payment.
• Make renting more attractive through legislation like rent control.
• Create more areas of affordable housing for people of different economic tiers.

These are proven ideas but success is never guaranteed.

Recent Government intervention

To curb defaults and protect borrowers, the Government implemented a stress test, which made it more prohibitive for most people to get a mortgage. Essentially, a borrower had to be able to afford a mortgage at a much higher rate, proving they could withstand an interest rate hike if it were to ever happen.

This was a measure to stabilize the market by creating a barrier to entry.

Pros and Cons

The pros for Government intervention is evident. In some cases, markets can correct themselves over time, but many times, help is needed. They require legislation that puts homeowners first or has the goal of getting citizens into their first home.  The Government has the means, resources and motivation to want a strong housing market.

The consequences of Government intervention are that it could benefit lenders more than borrowers or have the interest of builders in mind. Any strategy that doesn’t put homeowners first could negatively impact the market and citizens in the long run.

Above all, the national housing market specifically in Toronto and Vancouver needs to be strong and the Government needs to do what it can to ensure its growth.