Changing your mortgage.
You can save thousands of dollars by changing your lender. But, before you jump in be sure you are aware of exit fees. Also, ask your intended lender what fees will apply.
Step 1. Do your homework. There are multiple websites that compare current home lenders. If you have at least a 20% equity in your home you should be able to find some competitive rates. And, you might want to know your own credit ranking. Step 2. Before you change your lender contact your existing institution. Explain to them that you are entertaining the idea of changing to another lender. Give them some examples of current lenders that have a better offer. This puts you in a good position to negotiate. If your current lender is open to renegotiating your current loan then you can save money and the hassle of changing lenders. Step 3. Let’s say your current lender is not willing to alter your loan. Make a list of institutions and contact them. Outline your current loan agreement and ask them if they can do a better deal. They will do all the work for you. Changing banks is not a hard process. Step 4. Explore all the fees associated with breaking your current loan and creating a new loan. If the equity in your home is less than 20% you could be liable for Lender’s Mortgage Insurance LMI. Your new potential lender should be able to tell you all the costs. This could mean changing lenders becomes prohibitive. You can factor in these costs via our Home Loan Comparison Calculator. This is an important step when considering a move to a new lending institution. Step 5. Know the loan term in years of your new lender. You may only have 18 years left on your current loan. And your new provider is creating your loan at 25 years. This can mean you will end up paying thousands of dollars more in interest. Try and negotiate with your new lender the same length of time left on your current loan.
This is the simple criteria you should follow when you explore your home loan options. In reality, it is not that difficult. Any potential lender will be more than happy to see if they can cut you a new deal. They will administer all the transfers to make the change as smooth as possible. You can possibly be saving hundreds of dollars each month.