You might be thinking of renewing your mortgage because of the low-interest rates at the current time. Renewing a mortgage means you can swap your old mortgage for a new one that may offer you low-interest rates than the previous one. Now making such a decision will include a lot of discussions and time to come to a favored decision. It will be easy for you if you make a list of questions you need to ask your mortgage broker about the mortgage renewal. But before that, there are some questions that you need to ask yourself before you land on a final decision.
Belo mentioned questions that would help you make a good decision for yourself:
Ask yourself about your financial goals:
People opt for renewal because with the low interest rates, the financial situation can be drastically affected. Low-interest rate means you will save on your money that will reduce your monthly bills. If you are thinking of saving money on your monthly expenses, then opting for a mortgage renewal can be your best option.
Ask yourself if it is worth it?
Refinancing your loan is only beneficial if you think it will be worth the cost. You would not sign the renewal papers, then weigh the pros and cons and involve your mortgage broker to give you financial advice.
Ask if you can afford the closing costs?
There will be closing costs involved in the refinancing of the loan. You should consider paying the cost in cash, or else it will be added into your loan amount, therefore, increasing the total payable amount, which is the second way. The other one is no-cost, where these costs will be added to the interest. So, before opting for mortgage renewal, ensure that you can pay the closing cost and in which method.
Ask about the cons of the renewal:
it is evident to know both sides of mortgage renewal. If there are so many benefits, there must be some pitfalls as well. The cons will make it difficult for you to pay the loan in the future if you do not weigh both sides beforehand. It is better to know the consequences than to be taken by surprise. Knowing about the pros and cons will help you make a better decision.
Ask if you want to work with another lender:
Most people opt for renewal because they want a low interest rate which their current lender is not providing. At this point, you have to make a choice to stay or to leave, which means you will have to choose if you want to continue with your mortgage lender or want to work with someone else. For this, you need to find a mortgage lender who can offer a low interest rate. Compare the interest rates with the rates that the current lender is offering. You can also work with your mortgage broker, who can help in finding a mortgage lender with suitable options. Moreover, you can always negotiate with your present lender between the time of the arrival of renewal papers and signing them.