Real Estate

About to renew mortgage, recently broke with my ex, brokers say different things, help!

  • Last Updated:
  • Feb 8th, 2020 8:07 am
[OP]
Member
Sep 3, 2006
300 posts
123 upvotes
Montreal

About to renew mortgage, recently broke with my ex, brokers say different things, help!

Hello everyone,

here is a quick summary of my situation :

me and my ex broke a few months ago
we are in good terms and I decided to keep the house
both our names are on the mortgage
the mortgage will be renewed on april 2020

My bank (RBC at 2.99%) told me I should go to the notary at least 1 month before the renewal to ensure the whole process goes on without issues
The best rate I got so far (True North Mortgage at 2.69%) says it's pointless to go to the notary right now and it would be best to remove her name from the mortgage at the same time I renew with them

What sounds right? I'm confused and wonder why the recommendations I get are different. What is the right decision?

Also, I get higher rates from brokers in Quebec while I see lower rates from brokers in Ontario (that say they can do my mortgage). Should I consider brokers from outside my province?
19 replies
Deal Addict
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Mar 23, 2003
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If you're on good terms now run to get her name removed.
You never know how she'll feel in a couple days.
Or you...
Deal Fanatic
Jan 15, 2017
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They are not really saying different things. It is now Feb and your mortgage renews April. RBC is saying start the renewal a month before which is March. If you are switching the mortgage with True North, you will do that in March also in order to have everything completed for April.
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Jan 2, 2012
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Voltz23 wrote: Hello everyone,

here is a quick summary of my situation :

me and my ex broke a few months ago
we are in good terms and I decided to keep the house
both our names are on the mortgage
the mortgage will be renewed on april 2020

My bank (RBC at 2.99%) told me I should go to the notary at least 1 month before the renewal to ensure the whole process goes on without issues
The best rate I got so far (True North Mortgage at 2.69%) says it's pointless to go to the notary right now and it would be best to remove her name from the mortgage at the same time I renew with them

What sounds right? I'm confused and wonder why the recommendations I get are different. What is the right decision?

Also, I get higher rates from brokers in Quebec while I see lower rates from brokers in Ontario (that say they can do my mortgage). Should I consider brokers from outside my province?
By "ex" do you mean wife or girlfriend?

Is she agreeing to give you the house and all it's equity, or you are buying her out to keep everything?

I assume she is also on house title too, so would need to be removed there as well. This will involve a legal process/costs, and the lender may require her to get ILA (Independent Legal Advice) for her to remove her name.
Member
Dec 21, 2010
306 posts
215 upvotes
When u signed your mortgage most Banks nowadays has a clause about renewing a joint mortgage with only 1 signature. Your ex could have already renewed the mortgage without letting you know. Just saying

I think the easiest path is to renew with existing lender if you couldn't get rid of her name on the title and mortgage before renewal day. I suggest renew with an open term then plan to remove her name.
Deal Guru
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Feb 2, 2014
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Voltz23 wrote: Hello everyone,

here is a quick summary of my situation :

me and my ex broke a few months ago
we are in good terms and I decided to keep the house
both our names are on the mortgage
the mortgage will be renewed on april 2020

My bank (RBC at 2.99%) told me I should go to the notary at least 1 month before the renewal to ensure the whole process goes on without issues
The best rate I got so far (True North Mortgage at 2.69%) says it's pointless to go to the notary right now and it would be best to remove her name from the mortgage at the same time I renew with them

What sounds right? I'm confused and wonder why the recommendations I get are different. What is the right decision?

Also, I get higher rates from brokers in Quebec while I see lower rates from brokers in Ontario (that say they can do my mortgage). Should I consider brokers from outside my province?
Depends on what you're doing.

Do you need to buyout your girlfriend (meaning you need to refinance to pay her out)?

Or do you simply want to take her off title and don't need any money?
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
[OP]
Member
Sep 3, 2006
300 posts
123 upvotes
Montreal
I mean ex-girlfriend,
I simply want to take her off title and I don't need an money (we already settled everything related to money together).
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Jan 2, 2012
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Voltz23 wrote: I mean ex-girlfriend,
I simply want to take her off title and I don't need an money (we already settled everything related to money together).
The reason you are getting 2 different answers is because you are asking 2 different things.

"Renewing" means you are sticking with your same lender under the same conditions as your current mortgage. So for this it would be recommended to start the process to remove her from title early, so you can "renew" with the same lender when it comes due. Your current lender would advise you in this case what specific steps to follow to remove her from title and mortgage in time for renewal.

if you are intending to get a new mortgage and a new lender, this is NOT a renewal. You would be discharging your current mortgage, and opening up an entirely brand new one. For this situation what you were told sounds right, that the title/mortgage will be sorted out when you start the application. Of course in order to have the new mortgage set up in time before your current one ends, you should start the application process in plenty of time (say 1 month) before your current term end date.
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Mar 20, 2017
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rob444 wrote: if you are intending to get a new mortgage and a new lender, this is NOT a renewal. .
Noob question...What is the real reason behind the fact that sites like RateHub are clearly separating rates on 3 categories?
1)New purchase
2)Renewal
3)Refinance

I mean, if renewal is only possible with current lender on the same conditions...why do they even bother to post such rate on RateHub? If you can't call their brokers and ask "give me that rate".
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Mar 23, 2008
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GalvToronto wrote: Noob question...What is the real reason behind the fact that sites like RateHub are clearly separating rates on 3 categories?
1)New purchase
2)Renewal
3)Refinance

I mean, if renewal is only possible with current lender on the same conditions...why do they even bother to post such rate on RateHub? If you can't call their brokers and ask "give me that rate".
No, you maybe can't call their broker for that rate. But it could still be useful information for comparison/shopping sake.

C
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GalvToronto wrote: Noob question...What is the real reason behind the fact that sites like RateHub are clearly separating rates on 3 categories?
1)New purchase
2)Renewal
3)Refinance

I mean, if renewal is only possible with current lender on the same conditions...why do they even bother to post such rate on RateHub? If you can't call their brokers and ask "give me that rate".
They are different uses of the word "renewal". It's just semantics.

If you go to ratehub or a broker, a "renewal" means your current mortgage term has come due, and you are shopping to transfer your mortgage to another lender. This involves a completely new application with the new lender to be approved for mortgage, new appraisal, possible lawyer fees, a discharge of mortgage from current lender, etc etc.

A "renewal" with your current lender means you simply continue on with your mortgage at the previously agreed to amortization. There is nothing required to do except agree on the rate. This is obviously very different from above.

I believe the ratehub "refinance" term refers to when you want to break a mortgage mid-term and switch lenders. Or if you want to borrow more money/extend amortization, etc.
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Feb 2, 2014
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Voltz23 wrote: I mean ex-girlfriend,
I simply want to take her off title and I don't need an money (we already settled everything related to money together).
Then get her off ASAP if you want the best rates when your mortgage comes up for renewal.

You can't change the names on title when switching your mortgage to a different lender. If you do, it will be deemed a refinance, and the rates will be higher and you will have to pay refinancing fees (legal fees).

If you want the best rates when your mortgage comes due, only your name can be on title.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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rob444 wrote: The reason you are getting 2 different answers is because you are asking 2 different things.

"Renewing" means you are sticking with your same lender under the same conditions as your current mortgage. So for this it would be recommended to start the process to remove her from title early, so you can "renew" with the same lender when it comes due. Your current lender would advise you in this case what specific steps to follow to remove her from title and mortgage in time for renewal.

if you are intending to get a new mortgage and a new lender, this is NOT a renewal. You would be discharging your current mortgage, and opening up an entirely brand new one. For this situation what you were told sounds right, that the title/mortgage will be sorted out when you start the application. Of course in order to have the new mortgage set up in time before your current one ends, you should start the application process in plenty of time (say 1 month) before your current term end date.
This isn't quite accurate. When you switch lenders, you are NOT necessarily getting a new mortgage and discharging the old lien (this is more in line with a refinance). For a transfer, the old lien remains in place. As a result, you cannot borrow more money or extend the amortization. The lien isn't discharged, terms remain as-is, just the mortgage holder changes.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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GalvToronto wrote: Noob question...What is the real reason behind the fact that sites like RateHub are clearly separating rates on 3 categories?
1)New purchase
2)Renewal
3)Refinance

I mean, if renewal is only possible with current lender on the same conditions...why do they even bother to post such rate on RateHub? If you can't call their brokers and ask "give me that rate".
1-Pretty straight forward, it's when you are buying a property and a new lien is setup for the mortgage.
2-Renewal (aka transfer/switch). This is when you are keeping terms the same or lower (ie balance and amortization period) and want to switch lenders. If you want to stay with the same lender, it defeats the purpose of ratehub or brokers, as we cannot assist you if you're sticking with your current lender.
3-Refinance is when you're changing terms of the lien (ie increasing the mortgage balance or amortization or changing names on title like OP). Typically people refinance because they want to take more money out of the property (ie increasing the mortgage owing).

Regardless if you break mid-term or not, it's still a renewal/transfer/switch as long as you're not changing the terms of the lien.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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Jul 21, 2014
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Here is a question when it comes to renewal: is there ever a time when a lender would chose not to renew a mortgage?

Example:
My brother and his wife are coming up their renewal in Aug of this year after being locked in for 5 yr term. During that time they had one bad luck experience after another: job loss, severe car accident where she can't work, miscarriage, he filed a consumer proposal which is paid out this coming November, etc. Payments fell behind and their file was sent to a lawyer - long story short: we helped them get back on track, file was sent back to the lender and things have been fine, at least from what I know, for the last few months.

Currently they have about $180-190K of equity built-up in their condo.

Would their lender ever say to them: sorry, we are not going to renew because of past issues?
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Mar 20, 2017
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CdnRealEstateGuy wrote: 1-Pretty straight forward, it's when you are buying a property and a new lien is setup for the mortgage.
2-Renewal (aka transfer/switch). This is when you are keeping terms the same or lower (ie balance and amortization period) and want to switch lenders. If you want to stay with the same lender, it defeats the purpose of ratehub or brokers, as we cannot assist you if you're sticking with your current lender.
3-Refinance is when you're changing terms of the lien (ie increasing the mortgage balance or amortization or changing names on title like OP). Typically people refinance because they want to take more money out of the property (ie increasing the mortgage owing).

Regardless if you break mid-term or not, it's still a renewal/transfer/switch as long as you're not changing the terms of the lien.
The difference between Ratehub Refinance and Renew rates is 0.35%-0.4%.
For let's say 800k mortgage, it become a staggering $16k over 5 years.

If a borrower just wants let's say make 22years long mortgages back to 30years long and decrease the pace he pays off his principal. What is the justification to pay such a staggering penalty $16k? And it doesn't even include the penalty from current lender for early switching. It diminishes the whole purpose.
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GalvToronto wrote: The difference between Ratehub Refinance and Renew rates is 0.35%-0.4%.
For let's say 800k mortgage, it become a staggering $16k over 5 years.

If a borrower just wants let's say make 22years long mortgages back to 30years long and decrease the pace he pays off his principal. What is the justification to pay such a staggering penalty $16k? And it doesn't even include the penalty from current lender for early switching. It diminishes the whole purpose.
Not sure if this a question or a statement. But yes, if you're looking to extend the amortization to make things "easier", the higher rate for the refinance will certainly make you think twice for sure. Also, you will likely be stuck paying the legal fee. Same can be said if you need to refinance to take out cash for hardship...you will certainly be paying for the refinance.

The latter part is irrelevant. I mean you can also refinance at the end of the term and avoid the penalty. Regardless if you refinance or not, you're going to be stuck with a penalty if you break the mortgage mid-term and switch lenders...that's sort of a different issue related to breaking mortgages.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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CdnRealEstateGuy wrote: This isn't quite accurate. When you switch lenders, you are NOT necessarily getting a new mortgage and discharging the old lien (this is more in line with a refinance). For a transfer, the old lien remains in place. As a result, you cannot borrow more money or extend the amortization. The lien isn't discharged, terms remain as-is, just the mortgage holder changes.
Thanks for the clarification.
Can you do this with a collateral mortgage product as well?
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sidshock wrote: If you're on good terms now run to get her name removed.
This x1000. Do you even women bro?
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rob444 wrote: Thanks for the clarification.
Can you do this with a collateral mortgage product as well?
For a collateral charge, they re-register the lien.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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