Can I Change Mortgage Companies Without Refinancing?
When you sign up for a mortgage, you usually don’t do so with the intention of changing mortgage companies before your term is up. Unfortunately due to various circumstances, you may find yourself unhappy with your current lender. Perhaps another lender is offering a better rate or perhaps you simply don’t like the service that you’re getting.
If your mortgage is up for renewal and you have good credit, changing mortgage companies is usually a simple matter and your mortgage broker can help you compare rates and walk you through the process. If however, you are not near your renewal date, the only way to change mortgage companies is to refinance.
What is refinancing?
When you refinancing, you will need to break your existing mortgage and get a new one. Breaking your mortgage comes with financial penalties and the further away your renewal date is, the higher those penalties usually are. However, if you stand to save a lot of money in interest with the rate on the new mortgage, it may be worth it to refinance regardless of any penalties.
On the other hand, changing lenders too early before your mortgage is up for renewal could end up costing you more than you save. In this case, it is usually better to stick it out with the lender you have and switch to a new one at renewal time.
If you are considering refinancing, it is best to sit down with your mortgage broker and go through the scenarios. Your mortgage broker can run the calculations to see which option is in your financial best interest.
Two reasons to switch mortgage lenders
People make the decision to switch mortgage lenders for a variety of reasons but here are two of the most popular reasons why you should consider it.
Another lender is offering a better rate
If you are still several years away from paying off your home, then even a slight difference in interest rate can save you thousands of dollars over your amortization period. Again, if you sit down with your mortgage broker, he can run the calculations for you and show you exactly how much you stand to save by switching.
Another lender is offering better prepayment options
Most lenders will allow you to pay extra on your mortgage once a year, but the amount can differ from lender to lender. If you are determined to pay off your home early, a lender with better prepayment options is a smart choice and can help you be mortgage free years sooner.
If you would like some assistance in making decisions about your current mortgage, contact Matrix Mortgage Global today. We would be happy to go through the numbers with you and discuss your options.