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To Switch Your Mortgage
To switch your mortgage means to move your mortgage from one financial institution to another. There are several reasons why people switch their mortgages, but the primary reason is that another financial institution is offering a better interest rate of mortgage terms. Another reason people switch is because they were unhappy or unsatisfied with their current lender.
When you switch your mortgage the new financial institution transfers your current mortgage balance and the remaining amortization period on that mortgage. Your new mortgage payments are then based on these numbers and the interest rate offered by the new institution. If you had a 40 year amortization previously, you will be reduced to 30 years. Refinancing and switching are two different things however; each financial institution has its own policies with regards to the amount you can refinance without incurring fees. You also have an option of doing a switch with a total refinance but you will be subject to fees similar to that incurred with registering a new mortgage. If it is just a switch then many lenders use title companies that will do the paperwork at your home. Make sure you’re clear with your mortgage broker on what you want to do.
If you are simply switching your mortgage at renewal time to another financial institution then you should not be subject to any fees or payout penalties. If you decide you want to switch and increase your mortgage amount or lengthen your amortization period, then the mortgage would have to be re-registered and you would be subgject to additional fees.(i.e legal fees, appraisal fees, etc.)
You should start the process between 90-120 days before your renewal.