Many mortgage holders typically take out a mortgage with a lender and have a set-and-forget mindset. This means that they don’t review their mortgage or consider how they can save themselves money as economic changes take place. Often this is because they are fearful that changing lender or mortgage products will cost them far more than what their current lender is charging them.
Borrower fears are usually associated with penalties for making mortgage changes, such as mortgage exit fees or the new mortgage having higher upfront or ongoing fees that will cost more in the long run. Other borrowers feel that it is better to stay with the lender that they know and to not make waves or to ask for a better rate for fear of upsetting their existing lender.
But, mortgage renegotiation need not be a fear or an issue that you are reluctant to tackle. Instead, it should be viewed as an effective money management strategy that allows you to make your money really work for you.
So, you ask, “How do I approach the subject of renegotiating my mortgage without upsetting the mortgage cart?”
Here are some helpful tips to help you renegotiate your mortgage:
1. Make an appointment to see your existing lender. Take a notepad and pen with you to the appointment. Discuss your mortgage and take notes. Find out what your current mortgage terms are, such as your current interest rate and type, when your loan term expires, what your current ongoing charges are, and if you’ll incur any fees if you change mortgage products. Then ask your existing lender if they have any other mortgage products available and how these compare to your existing mortgage. Ask if you can have a copy of these comparisons.
2. Review your mortgage. Review the information you’ve collected from your appointment with your existing lender in detail. Do the math. If it isn’t going to cost you a great deal to change your mortgage and you think you can get a better deal than you currently have, then it may be time to seriously consider other mortgage products.
3. Contact a mortgage broker or conduct your own independent research online. Compare other lender rates and mortgage products with your existing mortgage. Look at interest rates, fees and charges, and features. Ask for a copy of these comparisons or print out the independent comparisons you’ve conducted.
4. Renegotiate with your existing lender. If you find that another mortgage is more cost effective or offers you better loan terms or features for less, then arrange to meet with your lender to discuss these. Take the mortgage comparison information with you to your meeting and use this as leverage to secure yourself a better mortgage rate. You can renegotiate your mortgage by simply asking if your existing lender can match the other mortgage package or offer you a similar deal.
Your lender will consider your request. In most cases, if you’re a client that your lender values and they can match the offer you’ve been given and still make a profit, then they may wish to renegotiate your mortgage.
Just remember that renegotiation may mean changing your interest type from variable to fixed, increasing or decreasing your monthly repayment amount, reducing or increasing your mortgage term, or even securing a better interest rate. Regardless of what changes you are seeking to make to your mortgage, you’ll never know if you can save yourself more, unless you ask. We suggest that you review your mortgage every 2 to 3 years to ensure that you are getting the best deal for you and your financial circumstances.
Is it time to renegotiate your mortgage? If so, then consider talking to an eChoice mortgage broker about a mortgage comparison TODAY.