Tips For Renewing Your Mortgage at The Lowest Rate
posted in Mortgage News
If it’s time for you to renew your mortgage, you want to be certain of getting the very lowest rate available, and while a local mortgage broker can help you, you can also help yourself by following these tips:
Give yourself plenty of time
If your mortgage term is due to end within six months, this is a good time to begin looking at other lenders to see what they can offer you, alternatively, you can engage with a local mortgage broker, and have them do the shopping for you. Ideally though, the best time to begin a full and thorough search for a new mortgage, is four months before your renewal date. This is because you won’t incur any prepayment penalties by renewing 90 to 120 days early with the majority of lenders.
Don’t ask, don’t get!
Negotiating for a better mortgage rate is the only way your lender will offer you a more favorable rate; fail to do this, and your lender will simply renew your mortgage automatically. It’s important to keep in mind that all mortgage renewals and their rates are negotiable, and you can even inform them that you’re checking out other options, to keep them on their toes and encourage them to offer you a better rate.
Lock in an interest rate
When you’re negotiating with your lender and they give you a low rate that you’re happy with, ask for a rate hold and lock it in, just in case it might go up. Your chosen mortgage broker can also help you with this.
Think carefully about your financial goals
It’s often the case that a homeowners financial or personal circumstances have changed since they signed for their first mortgage, so it’s important to reassess and consider whether you can still afford your mortgage with those changes in mind.
Should you renew, make the switch, or refinance?
Your current lender may not be able to offer you the best deal when renewing your mortgage, and switching or refinancing might be a better option. Choosing to renew your mortgage with your current lender means signing on to a new term for the same amount and amortization period.
Should you opt to refinance, this means moving your mortgage to another lender, or changing the mortgage amount or amortization period with your existing lender.
Switching mortgages to another lender is the same as refinancing your existing mortgage with a different lender, but the amount of principal being mortgaged remains the same.
Whether you renew, switch or refinance will depend upon your financial circumstances, and what your future plans are.
Work with a local mortgage broker
By beginning the renewal process as early as possible (as discussed above, ideally within 4 months of the renewal date) and working with a local mortgage broker who’s familiar with the market and the various lenders available, you’ll give yourself the best possible chance of getting the lowest rate.
Renewing your mortgage doesn’t have to be a big deal; work with a mortgage broker and carefully consider all your options with their guidance, for a smooth and stress-free renewal process.