5 Things to Consider Before Renewing Your Mortgage
Typically, your bank or mortgage lender will call and/or mail you 30-60 days before your mortgage needs to be renewed. At this point it is important to note that you do not have to rush into renewing your mortgage right away. It is worthwhile to consider all of your options, especially as they may reduce your monthly payments for the coming years.
Below, we highlight 5 important items you should consider before renewing your mortgage.
1. Develop a Renewal Plan
Many home owners will ignore their mortgage renewal until their time to renew is almost up. This is when they are forced into making hasty decisions. Don’t make such a mistake, as it can have damaging effects on your finances. You should take a look at the terms and conditions of the mortgage renewal and create a suitable plan for it.
Before choosing to renew your mortgage, you should evaluate your financial status. Make a solid plan for dealing with your important finances such as savings, children’s education, and monthly expenses. Spend some time researching about the current trends in the market, as well as current interest rates.
2. Ask For a Lower Rate
In many cases, your current lender may have the capability of offering you a lower rate, but they will not advertise this to you in their initial communication. Do not shy away from asking for a better rate. If you have already shopped around, let your current lender know that you are looking into other lenders and what the rates are that they have offered. This lets them know that you have a plan and that they should consider giving you a better rate in order to retain you as a client. Keep in mind, that your current lender may refuse your request for a lower rate, ultimately the decision is up to them.
3. Ask About Other Products or Features from Your Current Lender
It is possible that your lender may have introduced new mortgage features and products since you last signed up. Some of these products and features may include cashback programs, investment opportunities, pre-payment opportunities, accelerated payment options, and amortizations. Nonetheless, they may not tell you about them unless you ask or look into the options yourself.
4. Be Open to Switching Lenders
After your mortgage term is over, you don’t necessarily have to stick to the same lender. You have the option of switching to another lender, especially if they are willing to provide you a better rate and or features than your current lender. Before switching, we always suggest that you compare your offers from your existing lender and the new lender. Are the rates better than the ones from your original lender? Are the terms and conditions favorable to your current financial situation? Answer these questions before making a switch.
5. Consider Refinancing
Chances are that you have built up equity in your home, you may consider refinancing your home to take advantage of this built up equity. The additional funds pulled out of your home can be used towards future investments, to pay off debts, or to help with everyday bills. No matter what the funds are used for, you need to ensure that your mortgage term has expired before making this move.
When it comes to renewing your mortgage, the first offer is rarely the best offer. Take your time to build a plan and look into your options. These extra steps may take some additional time and effort, but can end up saving you hundreds, if not thousands over the term of your mortgage.
The Osborne Goddard Team is your local RE/MAX professionals, if you are looking for a real estate agent in Barrie, Bradford West Gwillimbury or surrounding areas, let us make your sale or purchase a “No Worries” experience.
