What’s Involved in Switching Your Mortgage?

There are many reasons why you might wish to switch your mortgages. The most common are to get a better interest rate after your initial fixed rate period has finished or to cash in some of the equity you’ve built up. Whatever your reason is, however, the process involves much the same steps and questions.

Find Out if It’s Worth Switching

Switching your mortgage can be an invaluable step to take, but it doesn’t suit every circumstance. It’s important, therefore, to calculate the cost of switching and how much you’ll save by doing so.

However, the costs charged to switch mortgages vary considerably between lenders, and some may offer cost-free mortgages. This is just one reason why it’s vital to get a wide range of offers, rather than just approaching one lender.

Switching the Hard Way

If you’re relying on your own calculations to switch your mortgage, you’ll need to work out your loan-to-value. This can be done by dividing the sum outstanding on your current mortgage by the current value of your property and multiplying the result by 100 to get the loan-to-value percentage.

This will give you some idea of the range of options available to you — essentially, the lower the percentage is, the more options you might have. However, you’ll need to ensure that the valuation your lender makes is realistic, since they may base it simply on viewing the property from the street. If you feel they’ve undervalued it, you’re entitled to challenge their figure.

Having established this, you’ll then need to approach a number of lenders to find out what’s on offer. Mortgage deals vary immensely, and there’s no guarantee that any one lender will offer the mortgage that’s ideal for your situation. This is going to require a considerable number of appointments, and you’ll then have to look at the figures you’ve been given to decide which would be the best to go for — which isn’t always simply the lowest repayment figure.

Switching the Easy Way

On the other hand, it’s far easier if you find a good comparison site, which will provide a wide range of options. This saves you from approaching each lender individually for quotes.

However, that doesn’t help much if you still have to navigate your way through working out the figures you need to base your decisions on. Some comparison sites will simply tell you what deals are out there, but what you need is one that will convert all your data into the best recommendations.

Why not give it a try on our site and see what you think? Contact Us Today