After owning your house for a few years, reassessing and renewing your mortgage terms is a great way to plan your financial future and save money for years to come. Even if you are unsure about the process, our hints on the best mortgage renewal terms will ensure you get the best deal!
Research Ahead of Time
When the time comes to start thinking about renewing your mortgage, it is beneficial to start early! According to ratehub.ca, you should start to look at your options 4 months before your current term is expired. This is the best way to save on any prepayment penalties that may be associated with your current lender. It is also the perfect way to give yourself some time to explore your options for lenders. Though your current loan may have been appropriate for your life a few years ago, you may need to find something new that is a better fit for your current situation. Spend some time researching different lenders before making your final decision.
Consider Your Long Term Financial Goals
Depending on what stage of life you are in, you may have different financial goals than you did when you purchased your home. Taking your long term financial goals into consideration when renewing your mortgage will help you find the best lender to suit your needs. Whether you choose a bank or a mortgage broker, it is important that you select a lender that will benefit you and your family in the long run.
Ask for a Rate Hold
After finding a lender that suits your needs, asking for a rate hold will typically allow you 60-120 days to secure the current rate you have. This is advantageous because even if mortgage rates rise during that period you are guaranteed to secure the current rate and save money in the long run. If the rates drop in that time, you are still able to negotiate your terms and secure the best rate!
Decide on Fixed or Variable Rates
Mortgage renewals are not just about getting the best interest rate. This is also the perfect time to reassess whether you would like to continue on your current type of rate, or switch to a different one. Regardless of whether you feel you would benefit from a fixed or a variable rate, doing your research and financially planning will help you decide which one is best for you.
Don’t Accept the Posted Rate
When renewing your mortgage terms, it is recommended that you not accept the posted rate your lender offers. Always negotiate and try to get a lower mortgage rate, even if it is only by .5%. Over time, the slightest decrease in your monthly fees will save you significant amounts of money, making it a financially smart choice for you.
When renewal time arrives for your mortgage, it is best if you are prepared and have done your homework! Taking some time to find the best option for you and your lifestyle can save you a lot of money in the long term. With even the slightest change to your mortgage terms, you will find yourself in a much better position to make the monthly payments on your home. For more information on renewing mortgage terms visit the Falconcrest Homes Blog.Tags: First Time Home Buyers, Home buying process, Mortgage Rate, Mortgage renewal, Mortgage tips, Mortgages