The average price of a home in Las Vegas is around $300,000. It is therefore likely that your mortgage payments are already your biggest monthly expense. However, when your mortgage contract needs to be renewed, lenders don’t always spare you and as a result, you end up paying a high-interest rate. Here are some tips that you can follow to get a better mortgage rate when renewing:
1. Start shopping very early
First, start shopping for a new mortgage rate as soon as possible. If you continue to do business with the same lender and you have 120 days or less left to your term, it may allow you to renew sooner and without penalty. However, it is unlikely that your creditor will provide you the best mortgage rate because creditors have their self-interest, which may or may not coincide with yours. For this reason, it is important to start looking on the internet along with consulting a mortgage broker before renewing your term.
2. Ask for a better mortgage rate
Your creditor will send you a renewal offer 30 days before the expiration of your contract, sometimes even earlier. In general, banks offer their customers a 0.25% discount off the posted rate. They, therefore, send you a letter by post, which you will only have to sign and send back to accept the offer. This is attractive because it is convenient and easy. However, you will certainly have to pay more interest in the long run. You can schedule an appointment with your lender for negotiating a better mortgage rate, but if you think you are going to get the same low rate that a new lender is getting, then that’s not going to happen. Furthermore, if you decide to continue doing business with your lender, you do not have to accept the first mortgage rate that it offers.
3. The best lender of yesteryear is not always the best lender of today
When you signed your mortgage term previously, your financial condition was somewhat different from what it is today. Be aware that economic conditions always fluctuate. Although it is convenient to stay with your lender, their terms and conditions may or may not suit your needs. It is therefore important to take into account your needs in terms of rates, prepayment options, etc. Choose your creditor according to your criteria; do not lose the chance to save on the interest rates available on the market.
4. Request a rate freeze
Once you scour the web and find the product and mortgage rate for your financial situation, book it. Most lenders allow you to book a rate between 90 and 120 days. This means that during these 90 to 120 days, you will take advantage of this rate, even if the rates vary. Finally, if the market is heading towards lower rates, you will be able to take advantage of the lower market. The rate-freeze option simply allows you to reserve a certain rate if you are concerned that the mortgage rate market will increase.
5. Changing financial institutions takes time
If you decide to change lenders, you will have to start the process early. Because changing lenders involves a new file review, you will have to reapply for a loan. With this, you will have to provide your proof of income, mortgage renewal letter, and proof that of your insurance. However, be aware that a week is not enough for a broker to complete the transition. If you don’t do it early enough; you may find yourself in a difficult position.
6. Most lenders will make the transfer for free
Performing the transfer involves fees (appraisal fees (between $150 and $500) and a change of creditor fees (between $5 and $395). However, these fees are not standard, so you can use your negotiation skills to bring the fees as much down as possible.
The process of renewing your home mortgage is not going to be easy, but if you can get in touch with a trustworthy mortgage company, then you can make things simpler for you. Let your file be analyzed by an expert so that you get the right assistance as to when you should renew your home mortgage to get a better deal in the next term and without paying penalty for breaking the contract for your current term. There is a small window that an expert will help you take advantage of so that you can save a few hundred or thousand dollars on your home mortgage.