People are today, more keen concerning their finances than they were a few years back. The trend of mortgage rates over the years determines the choices people make when applying for mortgage loans. When the mortgage rates are down, there is usually an increase in the number of people who go for refinancing. A good number of people actually refinance repeatedly as the mortgage rates fall down.
Although refinancing may not be the hardest thing to do, some people prefer other options. Invariably, it has a lot to do with the mere assumption that you need a full-scale refinance to get low mortgage rates. However, you may not always require a full-scale refinance to get low rates. By simply reaching an agreement with your lender, you can have low mortgage rates.
Agreeing with your lender
Before reaching an agreement, you need to sit down and have a conversation with your lender. It is the first step to a get mortgage rate reduction without refinancing. Even though the current mortgage rates in Montreal may be low and the only option that seems good at the moment is refinancing, much paperwork, closing costs and a new loan-term are some of the factors that make you opt out of mortgage refinancing.
Fortunately, you can talk to your mortgage lender regarding mortgage rate reduction. When negotiating for mortgage rate reduction, it is important to ask whether it is possible to change the rates without affecting terms of the old mortgage. Lenders can agree to your proposal giving you an opportunity to get a new offer in a short time.
In mortgage refinancing, there is a lot of paperwork that is involved unlike a case where a lender reduces the mortgage rates so you can stay afloat financially. When you reach an agreement with your lender and get an opportunity for mortgage rate reduction, you may have to do a little paperwork.
The paperwork has a small fee but it is worth your effort as you will be able to recover that amount of money several months later. The money that you get back later is usually based on interest savings thanks to reduction in mortgage rates. After a significant reduction in your mortgage rates, you can continue making your old payment as usual. The difference will actually be applied as an additional payment to the principal.
Owner of a mortgage
This is another factor that is vital when you want to get a reduction in mortgage rate without necessarily having to refinance. If a loan servicer is the actual owner of a mortgage, it is very possible to get a mortgage rate reduction. Therefore, it may not hurt to ask a loan servicer if he owns your mortgage. After all, the worst you can get from him is a mere no. However, when the response is positive, you can save tons of money by just getting an approval for mortgage rate reduction.
You may not always have to refinance to get lower mortgage rates even though many people choose to refinance when the mortgage rates go down. Remember, mortgage refinancing changes the terms of the old mortgage, leaving you with you with a new loan term. Unlike mortgage refinancing, talking to your mortgage lender to reduce your mortgage rate is an ideal way of ensuring the terms of your old mortgage are not affected in the process. You may be able to get a reduction in your mortgage depending on your financial position. The other essential factor that determines whether you can get a mortgage rate reduction is ownership of your mortgage. If a loan servicer owns your mortgage, you may get a reduction in the rate.