Assessing Your Needs During Mortgage Renewals

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You probably had big plans for the next few years when you signed your mortgage. When you bought your first condo, you might have imagined yourself getting a new job and settling down with Mr. or Mrs. Right. If you purchased a new house to accommodate a growing family, you might have anticipated having one or two more children within the next five years. Your lifestyle and financial needs may have changed dramatically since you signed your first mortgage all those years ago, regardless of the type of home you purchased or the type of mortgage you signed. A variety of factors, ranging from pay raises at work to having another child, can have an impact on your financial needs. Mortgage renewals are an excellent time to assess your financial needs and make changes to suit your current lifestyle better.

A 30-year fixed mortgage is the most common mortgage loan term.

Consider how much a person can change over thirty years! Children are born at that time and begin to raise their own families. Over time, the house purchased by expecting parents has become a weekend retreat for the grandchildren. Even with shorter 10-year or 15-year mortgages, lifestyle and financial needs and desires can change dramatically between the time the mortgage is signed and when the mortgage is renewed. While many people choose to stay in their homes when it comes time to renew their mortgage, they do not take advantage of the opportunity to reassess their financial needs and research other mortgage renewal options.

Lenders assume that too many people are too busy to shop around for new mortgages.

Lenders understand that few people have the time or energy to research new rates and find a new mortgage that meets their financial and lifestyle needs with today’s hectic schedules. Banks and other lenders will send out a notice with a new mortgage rate of their choice, knowing that the average person will simply open the envelope, read the rate, sign the necessary forms, and return it. While this is the quickest way to renew your mortgage, it may not be the best financial decision.

Renewal Mortgage - Assessing Your Needs During Mortgage Renewals

Mortgage renewals allow homeowners to shop around for a new mortgage.

Thanks to online tools and resources, the average homeowner now has access to information and tips that can help them sort through mortgage renewal options. A variety of factors influence what a person can afford with a mortgage, and these needs change over time. The ideal mortgage rate when you first sign your mortgage might no longer be appropriate for your current lifestyle or financial needs. Taking the time to research your options may result in a lower interest rate and a better mortgage.

Mortgage renewals provide an opportunity to reevaluate your lifestyle and financial requirements. If you intend to stay in your current home, take advantage of this opportunity to find a mortgage rate and term that is more suitable for you. What was the best mortgage for you 10, 15, or 30 years ago may no longer be the best mortgage for your current lifestyle and needs!