Before you go jump the gun and re-sign with your current mortgage lender, it’s always important to consider shopping around to see if you can get a better deal. The biggest monthly expense for most people is their mortgage payment, yet a shocking amount of households just automatically renew their mortgages when the term is up. Shopping around is always a good idea, because you may be able to negotiate a better deal. Here are three tips to help you lower your mortgage payments come renewal time:
1. Get a head start
What you definitely don’t want to do it wait until the last minute (i.e., when your mortgage is actually up for renewal) to start shopping around for new terms. Give yourself a little time and start shopping around for a better rate a couple months before your mortgage is up for renewal. This way, you’ll have plenty of time to search for and compare different renewal options.
2. It’s not all about interest rates
Please don’t just fixate on interest rates – there are plenty of other factors that determine a good mortgage rate. Remember to factor in the amortization period, rate types (fixed rate or variable rate) and the flexibility of the payment schedule. These are all crucial factors in lowering the cost of your mortgage payments.
3. Shop around
Before trying to negotiate a lower rate from your bank, find out what other banks and lenders are offering. There are quite a few websites that post current mortgage rates from banks, which can vary widely.