The onset of the COVID-19 pandemic and the resulting lockdowns have led to many homeowners wanting to renovate and/or redecorate their homes. People have spent about a year and a half being stuck in their homes, and many want a change. These changes can be as simple as putting on a fresh coat of paint in a bedroom to switch things up and as large as adding extensions onto their home.
Homeowners can usually afford to pay for smaller projects, but larger changes cost money that many homeowners do not presently have. So, how are homeowners paying for these major renovations?
The Answer: Mortgage Switching
Mortgage switching has become an increasingly popular trend among homeowners who want to renovate their homes. Rather than working with their current lender to try and adjust their mortgage agreement and achieve lower rates, many homeowners have decided to go to outside lenders and shop around for the best interest rates. With lower rates, and therefore lower monthly repayments, homeowners can top-up for their desired home improvements.
Homeowners may be hesitant when it comes to the idea of mortgage switching. After going through the long, stressful mortgage process to get the loan that they currently have, homeowners can be reluctant to do it again. Oftentimes, they believe that the savings aren’t significant enough to be worth the time and energy.
However, it has been proven that mortgage switching can lead to considerable savings for homeowners. Additionally, the mortgage switching process can be simpler than many people believe.
Mortgage Switching Process
There are essentially four steps to the mortgage switching process – conducting research, gathering the necessary documents, completing the application, and engaging with legal services. In general, the whole process can take about 6-8 weeks.
It is important to research and compare different mortgages and rates offered by different lenders. By reviewing the different lenders, you will have a good understanding of whether switching your mortgage is the right decision for you. Additionally, researching prior to the application process will help you ensure that you get the best rate possible.
The longest part of this process is gathering the necessary documents and completing the application. Pay slips, account statements, and loan statements are some of the documents you can expect to need during this process. With those documents, you will be able to move through and finish the application.
The legal step of the mortgage switching process involves engaging with a valuer to complete a professional valuation. Additionally, you will need to meet with your solicitor to sign the new mortgage loan agreement.
Mortgage switching can be a great option for homeowners looking to renovate their homes. Understanding what the process involves and talking with different lenders about what rates they offer can help you decide if it is worth switching your mortgage.