Switching Your Mortgage

Most people are unaware of the legal effect of switching lenders. When you renew a mortgage you are essentially starting the process again, discharging the existing mortgage, taking out a new one, and beginning the whole payment process, albeit at a lower principal amount. As such, you should treat this as just as important a process as the first time you arranged the mortgage. Remember your situation will most likely have changed since then, and you will require a different product with different terms attached to suit your situation.

The form that you are holding in your hand from the lender who did your previous mortgage financing (renewal letter), has a rate that probably is not as competitive as it could be. Don’t let the hassle from the first time you negotiated dictate you just signing the form and sending it back to the lender – it will most likely cost you in the form of higher rates.

The lenders count on 70% of renewals to come from clients just signing the renewal form and mailing it in – they are not forcing you – but they are preying on the human nature to embrace convenience. However, let us do the work for you – the same convenience, at a much lower cost to you and a product and term that will suit your current situation. The fact is that it is likely another lender will give you what you want at a rate you want – there are no legal implications to you switching.