What are My Options At Renewal
Channel: Ask Ana Cruz
Date: 2021-05-09

Our last video about Refinance and Referral has lead to many questions and calls, so today I want to break it down a little further for you.
First if you have not watched the Renewal or Refinance video, go back and watch that. 
https://youtu.be/rJBh-T36gCI
You can find our weekly videos on Youtube & Instagram. 

In the interest of keeping this videos short today I’m going to talk about term and amortization with a focus on 
Mortgage renewals and next week, I’ll address Refinancing. 

So today we are talking to all of you who have  a current mortgage. 
If you don’t have a current mortgage and your watching this - That’s great, I’m glad you’re taking the time to educate yourself and when you are ready, we are here to help you. 

Lets talk amortization and term:
Mortgages are typically amortized over 25-30 years and so that means that you have 25-30 year to pay off your mortgage however within that timeframe, you can choose a different term every time you are up for renewal. 

For example 
you start off with a 30 year amortization and you take a 5 year term - this means that for the next 5 years you are in that term - period then when that term is up for renewal 
(if you have made no additional voluntary payments towards your mortgage) you will have 25 year left on your amortization. 

So if you continue down this path of taking a 5 year term every time you are up for renewal then you will need six, 5 year terms to pay your mortgage in full.  
That’s 5 years x 6 terms = 30 years. 
Remember, you have the options to use your pre-payment privileges to shorten the amortization voluntarily  - that’s another video called pre-payment privileges - go look for that one too :) 
https://youtu.be/1NoLJ6DVH_I


So now that you understand terms and amortization. 
Let’s talk about the options available

During the time you hold a mortgage you always have three options

Renewal at the end of your term
Refinance at the end of your term 
Or 
Refinance at any time - 
however this option normally comes with a penalty 
since you would be breaking your contract with your lender 
and not waiting until the end of your term to make changes.

Today we are going to review Renewal at the end of your term in more detail 
So you’ve completed your current term 
and now you have the following options and decisions to make

What term do you want now? - 1, 2,3,4,5,7,10 years

What rate type are you looking for?- variable or fixed 

What payment frequency would you like - remember that you can choose from any payment frequency, 
it doesn’t have to be the same as you currently have. 

If you’ve been watching our videos, you know that I will always recommend accelerated bi-weekly 
or even accelerated weekly as this will help you pay down your mortgage effortlessly and systematically - kind of like a set it and forget it :) 

It’s important to note that the above mention are the only things you are changing at renewal. - Everything else stays the same - meaning: 
-the mortgage amount stays the same - if you have a $345,000 mortgage on your renewal date, that will be the amount of your new mortgage

-the amortization continues it’s course - meaning if you have a 20 year year amortization on your renewal date, then you are starting your new term with a 20 year amortization.

Now you know what happens at renewal  and so don’t to come back next week when we discuss 
Refinance at the end of your term and Refinancing in general

If you still have questions about renewal or want to work out what your are, 
Remember to connect with me and I’ll be happy to help 

So until next time, I hope you all have a great week 
Ana