Have you had the same mortgage for years? Are you wondering if you could get a better deal on the loan by switching your mortgage? Switching your mortgage can be a great option for some borrowers. In some cases, switching to a different lender would allow you to have lower interest rates and save considerably on mortgage repayments.
Understanding what mortgage switching is can help you decide if it is the right option for you.
Mortgage Switching Explained
Switching your mortgage simply means to move your mortgage loan from your current lender to a different lender. The terms of the original mortgage agreement will remain once the mortgage is moved to the new lender. The only two items that change when switching your mortgage are the mortgage term, or loan duration, and the interest rate on the loan. This is why mortgage switching and remortgaging are not the same.
Switching your mortgage can sound like a long, stressful process. Afterall, it involves going through the mortgage loan application process for another time. However, the overall process is simpler than many borrowers are led to believe.
Additionally, some borrowers are hesitant because they feel that the cost of the mortgage switching process will lead to very minimal savings from the mortgage switch being realized. However, the savings that most borrowers get from switching their mortgage are significant and cover more than the cost of the overall process.
Reasons to Switch Your Mortgage
Mortgage switching can be a better option for some borrowers than refinancing their loan with their current lender. And there are many different reasons that borrowers may decide to switch their mortgage.
One of the most common reasons that borrowers decide to switch their mortgage is to get a lower interest rate for their repayments. Although it is possible to receive a lower rate with your current lender when you refinance, this does not guarantee that you are being offered the lowest rate possible. Different lenders have different requirements and different rates.
Another reason that some borrowers switch is because they simply aren’t happy with their current lender. Bad experiences and poor service can lead some borrowers to switch, because they believe that a different lender will offer them a better mortgage loan experience.
The bottom line is that mortgage switching can be a great option for some borrowers. Regardless of if you are considering refinancing or mortgage switching, it is helpful to shop around with different lenders to ensure that you are always getting the best rate possible.