If you are currently in an expensive mortgage and want to save a bit of cash, maybe it is time to switch. But, how should you do that?
Tip 1) Ask your existing mortgage company what they can do.
It may sound daft, but if you are thinking of moving your mortgage to another bank, then tell your current lender. It is possible that they might just have a suitable alternative product that they can easily move you on to that will save you cash easily and quickly. Once such call that I made had my interest rate reduced in minutes.
It is in the interests of the current lender that you stay with them, so they are going to make you an offer to keep your business, if they can.
Tip 2) Make sure it is worth while.
Do not just go for the lowest interest rate on offer, it might not last that long if it is a special deal and it might have a longer penalty period when it ends that slightly higher rates.
What you will need to do is to look at what staying with your current mortgage is going to cost you. Add up the monthly payments for as long as the mortgage you are looking at will last – both the offer period and any tie in period afterwards.
Now, look at the monthly payments on the new mortgage that whatever bank is offering you and add to that all of the fees, penalties and costs involved in switching mortgage. Solicitor’s fees, deed release costs and so on will quickly mount up and could in no time reduce the benefit of any savings you are making.
Tip 3) Accept that not all products are open to you.
If you are reading through Top Ten and Best Buy mortgage charts, then you are seeing for each of the mortgages that are displayed what is usually a ‘typical’ interest rate. It should be a rate that a good number of people can get if they apply for the mortgage, but that does not mean that you are guaranteed it.
For example, if you only have a small deposit, are borrowing too much of the home’s value, have a bad credit history or are not in a secure job then the bank might not be willing to extend you the offer of the best mortgages available and you might be paying a lot more than you see before you.
Tip 4) Do not go it alone.
Trying to find a mortgage on your own is not easy, as I have already explained. You are never sure which mortgage rates you are actually eligible to apply for. You might be better off applying to banks that specialise in your particular needs, such as bad credit, low deposits or self employed.
But, which are these lenders? That is where some free advice from a mortgage advisor can come in, who can weed out the products that don’t match your needs. So it is always well worth seeking help – especially as it is normally free!