Reasons Not To Switch Lender
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There are some homeowners who should carefully consider what they are doing before changing from their current lender. There are several reasons why you may be better off staying with your current lender, however don’t forget to review the situation regularly as the market is constantly changing.Financial Penalties
Your present mortgage could have some severe financial penalties if you decided to change to something more competitive and under these circumstances you may well be better off financially if you stay put.
Already Got The Best Deal
It could be that after shopping around for a better deal and doing some calculations involving fees, penalties etc. , you find that you wouldn’t be any better off if you switched to another lender. Changing in these circumstances would obviously be pointless, however you should regularly look at what other deals are available as you may find at some point that you no longer have the best mortgage for you.
Near The End Of Your Mortgage
If you have been paying off a mortgage for some time, it could be that the amount you would need to borrow from the new lender is too small for them to consider you. You may also find that the cost of switching when near the end of a mortgage makes the change uneconomical.
Changed Personal Circumstances
Some people may find that due to changes in their personal circumstances, they would no longer be able to get a mortgage elsewhere or have a reduced choice. For example, if they have become self-employed or one partner is no longer in employment.
Interest Rate Changes
As mortgage fees and interest rates are constantly changing, you could find that at the present time it doesn’t make financial sense for you to switch lender. It’s always worth keeping an eye on the situation though, as fees and rates could change to the point where you would be better off switching.
Disclaimer-
This guide does not constitute financial advice. Anyone seeking financial advice should seek appropriate professional advice.
Is A Refinance Mortgage Right For You?
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When looking at monthly spending, for the majority of people their mortgage is the biggest outgoing. A Refinance Mortgage (Remortgaging) can therefore mean saving a lot of money, even paying fractions of a percent interest less on a new deal can add up to big savings over time.Standard Variable Rate Mortgages
If you are currently have a Standard Variable Rate Mortgage then you are likely to be able to find yourself a more competitive rate of interest elsewhere. Don’t forget though to give your current lender an opportunity to give you a better rate of interest than they are now giving you, as the rate you are currently on may well be negotiable. As the saying goes, it’s easier to keep a customer than to attract a new one so don’t be afraid to ask.
Changed Personal Circumstances
If your personal circumstances have changed since you set up your current mortgage then it could be that the product you now have is no longer suitable for your new circumstances and it would therefore be a good idea to shop around for something more suited to your present situation. For example you may find yourself on a higher salary and want to make extra payments to pay off your mortgage earlier, but are prevented from doing so by your current lender. Alternatively you might now need a flexible mortgage where you can miss a payment now and again. There are many different mortgages to suit a multitude of different situations.
Endowment Mortgage Shortfalls
The money you pay to your lender in the case of endowment mortgages is used partly to pay the interest on the loan and the rest is invested hopefully to grow enough to pay off the original amount you borrowed. If the money that was invested hasn’t grown sufficiently to cover your debt then there is a shortfall which you yourself are responsible for paying. If you find yourself in this situation, you could be better switching partially or completely to a repayment mortgage, and professional advice would be strongly recommended.
Disclaimer-
This guide does not constitute financial advice. Anyone seeking financial advice should seek appropriate professional advice.
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