Renegotiating a mortgage loan is like ending a bad marriage that has gone sour.
It’s a painstaking process but at the end of the day, you will be facing a clearer and more stable future.
This is especially true if you’ve been through a lot of issues with your mortgage. Of course, there are several reasons why you might want to enter into a new mortgage deal. The most common of these reasons or indicators are tackled below.
To renegotiate a mortgage deal, you have to approach your lender and clearly explain the situation you are in. Your goal with the new deal is to convince your lender that your proposal will benefit them in the long run.
Here are the indicators that it’s time for you to enter into a new mortgage deal:
1. You want to settle your debts as quickly as possible.
There are two good reasons why this is a beneficial strategy.
One, you pay off your loan sooner than the original allotted time. And two, you will have significant savings in the long run.
What you need to do is to renegotiate by refinancing your mortgage loan. You’ll promise to settle your obligations faster while you get lesser interest rates in return. Both parties win in this scenario so it would be difficult for your lender to not accept the proposal.
2. You can no longer afford your mortgage payments.
This is an all too common problem in the mortgage industry.
The good news is that lenders don’t normally foreclose on homes unless it’s the only option. This is why they are always willing to accept new terms like refinancing.
For example, your lender may extend your loan period so that you are going to pay less amounts with your monthly payments.
3. You want to get a lower rate because of the current status of the market.
You have to keep in mind that mortgage rates these days are much lower compared to previous years and decades.
With that said, you should consider talking to your lender if you can get a rate that’s at least 0.3 percent lower than your current rate. If you’ve been paying your dues without any hang-ups, it wouldn’t be that difficult for your lender to agree to a reduced rate.
4. You want to change your variable mortgage rate into a fixed rate.
This is very important because experts in the industry are projecting that rates may gradually increase in the coming years.
With a fixed rate, your monthly payments will remain the same no matter the movement in the market.
5. You want to switch to a new lender.
This is a bit more difficult to do especially if you have entered into a strict deal with your current mortgage lender.
There’s a standard process that you must follow in switching lenders. Make sure that you are aware of the risks before you make the move.
In a nutshell, renegotiating your mortgage loan can be done if you approach it properly. The indicators discussed above should encourage you to try and enter into a new deal.