Renewing Your Mortgage? Think Like a First-Time Home Buyer. Part One

It’s a curious thing, but as we settle into our new home it seems life gets busy and we put our mortgage payments on auto-pilot.  For most of the time during the life of our mortgage with our lender our relationship is one of necessity.

However, about 30 days before our present mortgage ends we receive an automated renewal notice and what’s staggering that half of us will sign it without shopping it around.  Now you understand why banks are reaping record profits.    A 30 day window works great for your mortgage provider, but in reality you should really start your research 120 days prior to  your renewal date .

 

 First Steps

The first thing is to start your mortgage renewal process 120 days prior to the end date.  What you want to give yourself is an adequate amount of time to research what is the current mortgage environment.  Before you start give yourself first of what I call a financial and personal diagnostic.  This is critical, as here is where you want to answer what your present situation is  as well of where you see yourself for your next mortgage period.  What to consider:

  • Analysis of your cash flow and what your projections are for the future.
  • Do you plan on switching careers, changing your marital status or having a child?
  • What is the present economic forecast, are interest rates expected to fall, remain unchanged or increase?
  • Does  your living space fit your needs and are you considering selling within the next year.
  • Get a copy of your most recent credit score as it will be used by lenders to determine you ability to meet their lending requirements.   You can get one free at the following link

A lot can change over the term of a mortgage so it is in your best interests to establish an accurate and honest assessment of your predicted financial and housing needs.

Getting Down to Business

Now, since establishing your 120 day mortgage window you see that have put yourself in a much better negotiating position; as opposed to having to feel rushed within the confines of your present lender’s 30 day renewal window.  You are now armed to once again start discussions with Banks and independent Mortgage Brokers to see who is prepared to win your business.  What you want to keep in mind is not to get so fixed on who has the lowest rate, but look at who is offering the best overall mortgage package which is tailored to your present and future needs.

Check out part two of my blog where I will get into the specific questions which you will want to have answered.  Renewing Your Mortgage Part Two