Usually the term required for paying off the cost plus interest while buying a house is much longer than the period for which a loan can be availed in Canada. Thus, at present, if you are having a mortgage and the term of the same is expiring, then you have to go for the renewal of the same if there is still balance to be repaid. It is always advised that you should start mortgage renewal process by talking to your current the mortgager and other lenders well in advance. Most of the people start their search at least four months in advance. In this way, you get more time to search out the best mortgage rate and terms. If you get better rates from any other lender, then you should opt for switching providers.
Credit score plays a vital role when you want to change your lender. If your credit score is good, you can always change over to a new lender with better terms.The credit score depends on the timely payment of your dues. So, whenever you are going for any type of loan, be careful to make repayments in time. In very rare cases, mortgage renewal is denied by other lenders. In this type of case, your only option is staying with the current lender as the chances of refusal by it are quite low, although you may be stuck with mediocre terms and unsuitable rates.
The mortgager usually verifies the debt service ratio of the person taking or renewing the mortgage. The borrowers with higher debt service ratios are more likely to struggle to meet their debt obligations. The factors taken into consideration while calculating the debt service ratio are the total income of the borrower in comparison to the total expenses and debt.