3 Ways to Prepare For Your Mortgage Renewal And Avoid Embarrassing Mistakes
A mortgage renewal is a great opportunity to update your mortgage to reflect current market conditions. When your current mortgage term expires, you will have the option to renew or refinance with another lender.
Most private lenders allow their borrowers to renew their mortgages. However, before you sign the renewal letter sent to you by your lender, you must have a proactive approach and understand what you are doing. The following are simple tips to prepare for mortgage renewal to ensure you do not get embarrassed.
Plan In Advance
The best way to prepare for the renewal is to plan. So, start early and don’t accept rates until you have done enough research. The best thing you can do is to review your financial goals and see if the product suits your needs. Use a mortgage calculator to check the best rate based on your financial situation. The results will help determine if the lender offers rates that suit your needs. Remember, the lowest rates are not always the best option. Therefore, research enough and know what you need in the mortgage. It will help you decide based on the lender and product you choose.
Ask For a Better Rate
Even if the maturity date of your mortgage is not yet, it is still advisable to start negotiations early. When private mortgage lenders send you the renewal slip, they make it easy for you by providing a quick way to renew. They may even offer a discount on the rate posted on the renewal slip. You need to know that this is not often the lowest rate. Therefore, you may not benefit from another low renewal rate.
Furthermore, other lenders offer lower rates on the same. Negotiating will help you land a better rate. Therefore, before the mortgage renewal, ensure you negotiate a better rate with your lender. If it is impossible to lower the rate, consider the option mentioned in the next point.
Get Ready To Switch Lenders
Lenders will discourage you from switching. However, other lenders may be the only option if you want a better rate option. Start by submitting the application papers like you do when applying for a new loan. You will need to provide a renewal letter, proper insurance of your property, proof of owning the house, and income. The lender will need some time to review your application. This is why we insist on doing it early. Comparing mortgage rates is a wise decision that might not seem so initially. However, shopping around allows you to pay your mortgage based on your current financial capacity. The dollars you save with the low rates could help pay down some debts or cover other expenses.
Renewing a mortgage with your private lender is easy. However, accepting the first low offer may not be the best thing. It is advisable to take some time and research to know the best option. Use these tips to get better rates and terms that fit your current financial status.