About mortgages, Please help

I have a mortgage with TD. The last mortgage payment day is April 1st 2011.

Q1: Which day is the start day of the new mortgage term? April 1 or May 1

Q2: When do I need to shop around?

Q3: If I still stay with TD, the new mortgage will become a collateral mortgage, is that right?

Q4: If the new mortgage is a collateral one, what benefit I can get? For example the house worth 400k and have 300k mortgage balance left.

Thanks for any input. 

 Great questions and I hope you'll find my answers helpful. I work with TD so remember you can always give us a call at 1-866-222-3456 or come and talk to us at a branch http://www.tdcanadatrust.com/locator/index.jsp


Q1: Which day is the start day of the new mortgage term? April 1 or May 1

If April 1 2011 is your maturity date, then your new term begins on April 2 2011, and your first monthly payment on the new term will be due on May 1, 2011. TD mortgage payments are collected in arrears and not in advance, hence your payment for May 1 2011, will reflect the new term/rate.


Q2: When do I need to shop around?

You will receive a renewal notice 60 days in advance of your maturity. However, I would advise that you meet with your local TD branch, up to 120 days in advance to discuss all your available options.


Q3: If I still stay with TD, the new mortgage will become a collateral mortgage, is that right?

When you stay with TD, and opt to renew your mortgage on maturity (not refinance for additional funds), your charge will remain as is. If however, you refinance or take out additional equity (provided you are qualified/approved for the increase) your mortgage charge would be updated to the new collateral mortgage charge.

Q4: If the new mortgage is a collateral one, what benefit I can get? For example the house worth 400k and have 300k mortgage balance left.

If you refinance for additional funds, where the old charge is replaced with a new collateral charge and you choose to register your collateral charge for more than the approved principal amount of the mortgage, by up to 125% of the property value, you could then increase your future borrowings without having to re-register the charge under certain circumstances. This would save you money on your future refinance activity against the same property.


So in your example:

Your house is worth $400K today and you hold a mortgage of $300k, but you decide to set up a charge for $500K, and in 2014 your property value has increased to $450K and you would like to refinance some additional equity. Provided you qualify for the added amount and the property value supports the new request, your can refinance your mortgage and re-use the collateral charge if the following criteria still applies:
The mortgage was registered with a collateral charge.
The property value supports the new request.
The amount of the collateral charge will support the customer's new lending application request.
The borrowers on the new application match the property and the existing registration.
There has been no subsequent lending on the property.
This eliminates any Solicitor/In-House Registration fees.

And the other benefit is that you can switch between a mortgage and a Home Equity Line of Credit without having to re-register the charge – offering you more flexibility and choice

Best of luck,
Farhaneh Haque, Regional Sales Manager, TD Canada Trust

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The last mortgage payment would be the day that the balance is due in full. Should be on your paperwork.

Q2: When do I need to shop around?
Sooner, the better. Preferably, you don't want to be 'under the gun' and forced to accept something that's not optimal.

Q3: If I still stay with TD, the new mortgage will become a collateral mortgage, is that right?
Maybe. The collateral mortgage change applied to all new mortgages issued by TD, but not renewals of existing ones.

TD might offer you a line of credit for $20k, secured by your house, under a collateral mortgage charge.  I would be wary of really having flexibility and choice because if you refinance for 125% property value you will be tied to it because will need to pay that off fully before being able to transfer to another institution.