If you're considering switching lenders at mortgage renewal time, you're not alone. Many households decide that alternative options are better than staying with their current lender because their financial goals have changed and they want more flexibility with another lender.
If you own a home, a lower mortgage rate and better terms is worth striving for because it could save you time, energy, and potentially thousands of dollars. While your principal stays the same, a lower monthly payment is an incentive for many homeowners.
Whatever your reason for switching mortgage lenders at renewal you're in good hands. We walk you through the steps before your renewal contract expires.
How to Switch Mortgage Lenders
When you're thinking about changing your mortgage to a new lender, here are the first steps to take:
- Set a date for when to start shopping around for lenders; ideally 3 to 4 months before your mortgage contract expires.
- Write down your financial goals. Are you more concerned about a lower interest rate, payment options or the amount and frequency of payments?
- Shop around: When you're changing who you borrow from, it's always a good idea to see what rates are available from multiple lenders. A mortgage broker is the best option to help you with this.
- Have your financial documents ready. Changing lenders means starting the mortgage process from scratch, so make sure you have the required financial documents.
How Much Does it Cost to Switch Lenders?
Switching lenders involves fees. While a mortgage lender switch is likely to save you money in the long run, some lenders will charge you fees to get the job done. Other lenders will waive the fees, so ask around when you're planning your move.
Here is a list of potential fees for switching your mortgage to a new lender:
- Appraisal fee: Switching lenders means getting a new appraisal, even if one was done when you originally purchased the home. Expect to pay somewhere between $250 and $350.
- Discharge fee: Your current lender may charge you up to $400 to discharge your mortgage.
- Assignment fee: Changing from the old mortgage contract to the new contract will cost you $5 to $395.
- Legal Fees: A lawyer is required to complete a new mortgage contract. Fees vary.
While you can switch lenders before your mortgage contract expires, it's more financially savvy to change before your mortgage renewal date.
Get a Better Mortgage (GABM) offers personalized, professional, and ethical mortgage services. GABM also advises on custom mortgage solutions, including second-home purchases, debt consolidation loans, self-employment mortgages, and more. Every credit journey looks different. Book a Consultation with us today.
