Thinking of switching your mortgage? Help is at hand from Shire Direct!
Are you thinking about Switching Mortgages? Well, you're in the right place for all the information, help and advice you'll need for switching your mortgage.
Switching Mortgage (also known as Remortgaging) is simply the act of changing from one mortgage to another mortgage. So why would you want to switch mortgages? Well, there are a number of reasons for switching your mortgage, and we'll explore these below, and look at how to switch mortgages as well as how Shire Direct can help!
Table of Contents:
What is Mortgage Switching?
So exactly what is Mortgage Switching, and why would anybody want to do that? Well, switching your mortgage is simply changing from one mortgage to another mortgage. This process is also commonly known as remortgaging.
The mortgage marketplace has evolved massively over the last decade, and the days of staying with the same Mortgage Lender for the lifetime of your mortgage are now long gone.
This evolution has led to a very competitive marketplace where consumers can benefit from more competitive interest rates and other features. Great news for the consumer!
You don't even necessarily have to switch mortgage lenders to switch your mortgage! You may be able to get a better deal from your existing mortgage lender.
Next up, we'll take a closer look at the potential reasons for switching mortgages.
Why switch mortgages? Reasons for switching mortgages...
There are number of reasons why people switch their mortgages, including combinations of the following:
- To take advantage of a mortgage scheme with a lower interest rate
- To borrow available equity from your property
- Switching to a fixed interest rate from a standard variable rate if you believe interest rates are likely to rise
- Switching to a Flexible Mortgage scheme, that offers flexible repayment options such as underpayments, overpayments, payment holidays and a drawdown facility.
It's a good idea to explore the possibility of switching your mortgage, as you may well be able to benefit from a mortgage scheme with a lower interest rate, especially if you believe you are paying a higher interest rate than that of other schemes available.
Or perhaps you may wish to consider switching mortgage to release available equity that has accumulated in your property. It's likely that the value of your home has probably increased since you took out your original mortgage.
By switching mortgages, you could not only switch to a better deal with a better interest rate, but you could also borrow extra money at the same time from any available equity to use as you see fit, maybe even for home improvements - to further increase the value of your home!
You could also change the type of mortgage scheme when you switch your mortgage to a flexible mortgage. Flexible Mortgages have been a real innovation in the mortgage marketplace over the last decade or so, and were designed to accommodate modern-day lifestyles. Some of the features of a Flexible Mortgage include giving the consumer the ability to make underpayments, overpayments and take payment holidays. For more information and details of this type of Mortgage, together with it's associated features and risks then why not take a look at our flexible mortgage glossary page,
How do I know if switching mortgages will be a good idea for me?
It's important to understand whether switching mortgages will be appropriate for you, and your needs and requirements or not. So, how can you decide if switching mortgages is a good idea or not?
Why do I want to switch mortgage?
Well firstly it's a good idea to think about why you want to switch mortgages? Are you looking for a better interest rate, or are you looking at switching to a more flexible mortgage scheme? Perhaps you are looking to release equity in your home to raise funds, or maybe a combination of all of these aspects.
When it's clear in your mind, you shouldn't be tempted to simply look for a remortgage product with the lowest interest rate - as it may not suit your circumstances and indeed requirements!
The potential costs of switching mortgage...
Next, it's a good idea to think about the costs involved with switching your mortgage. This will ultimately depend on your current mortgage lender. Some mortgage lenders charge a penalty to switch your mortgage. If you ask your Mortgage Lender for a Redemption Statement you'll find out how much you still owe on your existing mortgage and any charges that may be involved for switching your mortgage.
You may come across several different charges such as Early Repayment Charges (ERC's) and Interest Charges. If an Early Repayment Charge is applicable on your current mortgage it could amount to hundreds or possibly even thousands of pounds, and is likely to be the most expensive part of switching your mortgage - that is of course assuming an Early Repayment Charge is applicable.
Early Repayment Charges are most likekly to occur where your current mortgage is a Fixed, Discount or Capped Rate Mortgage product. Some mortgage products have a tie-in period which may see you having to pay Early Repayment Charges even if you're paying the lenders standard variable rate.
Interest Charges may also apply whereby some Mortgage Lenders will charge you interest until the end of the month where your mortgage switch takes place. Additionally, there could also be other fees applied by some Mortgage Lenders such as a discharge fee (also referred to as an Exit Fee, Sealing Fee or Administration Fee). This fee will vary from lender to lender, and can be less than £100, although some Mortgage Lenders charge £300 or more.
Then talk to Shire Direct!
Why not give us a call on Freephone 08000 282 281, or contact us online, and talk to one of professionally qualified mortgage advisors about your requirements and circumstances. Tell us about your current mortgage and we'll see if we can find you a better remortgage deal that suits your requirements!
We'll take into account your requirements, your existing mortgage and any applicable charges from your mortgage lender that may be applied if you want to switch mortgage.
In taking into account your requirements, we'll also look at the cost of your new mortgage deal to see if switching mortgages will be suitable for you.
We'll look at the costs of a new mortgage including a Valuation Fee, any applicable Mortgage Arrangement Fees, any Higher Lending Charges that may apply, Disbursements, and our own Mortgage Broker Fees and we'll find out for you if switching your mortgage will be appropriate.
It's important to look at the bigger picture and not just the costs of switching your mortgage, and that's where Shire Direct can help. We'll not only look at the cost of switching mortgage, but we'll advise you of any other implications it may have.
It won't always be the case, but you might just be able to find a mortgage deal that is more appropriate and more suitable to your present circumstances and requirements and future aspirations than your current mortgage deal is.
So why not give us a call, you've got nothing to lose by asking us to find out for you!
Further information and resources on switching your mortgage...
We hope you found the information on switching your mortgage to be helpful. If you're looking for further information and help why not give one of our professionally qualified Mortgage Advisors a call who will be only too happy to help in any way possible.
Additionally, why not take a look at our Remortgages explained page, which offers further details on the Remortgage process and how it works.
Enquire online or call us today!
So, if you are looking into the possibility of switching your mortgage, please don't hesitate to contact us .
You can either enquire online at any time, or call us free on Freephone 08000 282 281, our lines are open everyday (including the weekends) from 8.00am until 10.00pm. In either instance we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
