Five Things to look at Before Switching your Mortgage

 

Switching your mortgage can be a lot of work but it can also save you a large amount of money. Before switching, you should pay attention to the following:

  1. It is important to know what your repayment history looks like. Have you been making your payments on time or has this been a problem for you? This will be shown on your credit history as well which is something that will be looked at by the banks.
  2. You should also check to make sure that you do not owe more than what your property is now worth. Switching your mortgage may be difficult for you if this is the case.
  3. Figure out your LTV which is the loan to value. This is a ratio that lenders use to figure out how much risk is being taken on the loan. You can figure out this number by dividing the barrowed amount by the appraised value and multiply that amount by one hundred. Lets say for example that the property that you are looking to buy is €300,000 and you deposit €30,000 then you will need to borrow €270,000. To figure out your LTV you must do the following equation:

€270,000/€300,000=0.9

0.9*100=90%

Keep in mind that if you have been paying off your mortgage that you need to use the number you have remaining, not the original amount of the mortgage. You will take the loan amount left divided by the appraised value and multiply that number by one hundred. The lower your LTV, the more lenders you may have available to make offers.

  1. Paying attention to what types of fees may come along with switching is also important. Is it going to be worth switching for you or would you be paying more in fees than you would be saving? You definetaly do not want to go through the process of switching your mortgage if you aren’t going to be saving.
  2. You should also be aware of what lenders are willing to offer before committing to switching. Make sure that you ask and shop around to find a deal that is going to work for you.

These are only five things for you to pay attention to when looking to switching your mortgage. Going through this process can be daunting but it can be more than worth it is the savings are there. Once running a few numbers, you can determine if it is something you are willing to move forward with.

This article was written by Nicole, an intern at Irish Mortgage Brokers and Yes.ie from the USA

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