Have you received your first mortgage renewal letter yet? Before you sign it, there are a few things you should know.
Your mortgage will need to be renewed at the end of each term, which is usually 5 years. At this time, your lender will send you a letter with their proposed words. However, you don’t have to accept those terms. You might be able to get better conditions if you put in a little effort.
Mortgage Renewal
When your mortgage term ends, and you sign up for a new one, which is called a “mortgage renewal.” Renewing your mortgage allows you to renegotiate your terms, interest rate, and even your lender. However, if you do want to try and get a better mortgage contract, it will take some work. And, lenders expect that you don’t want to invest that time and energy. If you’d like to change something about your mortgage, you’ll have to put in some work. Before you make any decisions, it’s a good idea to get some mortgage renewal advice.
Tips to Renegotiate Your Mortgage
When it comes to getting better terms for your mortgage, there are some things you should know. Understanding the process and what you are free to do can help you make the best mortgage renewal decision for you. Here is some advice when it comes to renewing your mortgage.
1. Consider your financial goals
A mortgage term can be a long time, and your financial situation may have changed. Renewal time allows you to consider your financial goals and whether your current mortgage is helping you reach them. For example, is there a chance that you may sell your home before your next term is over? In that case, you’ll want to find a mortgage product with a shorter term.
2. Research your mortgage renewal early
Start researching your options early — about 4 months before your term is over — to give yourself enough time to gather enough information. If this sounds like a lot of effort, consider working with a mortgage broker who can do it for you.
3. Seek a lower rate
You don’t have to accept the rate that your lender offers. Try calling them and asking them for a lower one. If you have a mortgage broker gathering information for you, they can find out what lenders are offering the best rates. You can use this to your advantage when talking with your current lender.
4. Make a lump-sum payment
Putting a large amount of money down on your mortgage at renewal time is an excellent way to bring down the balance of what you owe. An added benefit is that you won’t have any penalty fees for doing so.
If you are interested in learning more about your mortgage renewal options, call Northwood Mortgage™ at 888-492-3690 or contact us here.
