Do you think you should be switching your mortgage in Donegal, Ireland?
There is a lot of noise around at the minute about switching your mortgage to a different lender.
So, let’s look at Should, Could & Would you switch providers.
Should Ya!
Long answer short. Yes, if you are paying more than you should. That is if your interest rate is higher than what is available for other providers. Always get advice though from someone who is not tied to any one lender, before switching your mortgage. While some offers look great, you need to know the full picture.
You need to know exactly what is being offered, the pros and the cons. Your existing provider might offer a better rate than you are currently on as well, so check with them as well.
Is it always a good idea to switch?
No! not in all cases
Whilst the interest rate is a good starting point to consider whether to switch or not it is not the only factor to consider. If you are on a Tracker rate with your current provider for instance, you need to consider the implications of switching, the new provider will not give you a tracker rate. Caution is needed here, and advice is very important.
Click here for more on switching from a Tracker Rate
Your individual circumstances also have a bearing on whether you should switch your mortgage or not.
Things like:
- Your Age
- How long your mortgage has to run
- Your plans for the property in question, if you are considering home improvements.
So, the “Should Ya!” reason to switch, in the first instance, is to save money or and get better over all deal.
*Example
This is an actual case we looked at this week. (Obviously, names have been changed)
Bill & Mary, have a mortgage balance of €175,000 with 23 years to run, the current interest rate is 3.15%, they are paying €892 monthly, there is a rate of 2.3% available to them, the repayment would be €817 monthly, a saving of €75 monthly. It could be argued this would represent a saving of €20,700 over the remaining 23 years.
Do you enjoy overpaying?
If you enjoy overpaying for everyday items, then, you should not switch providers. Remember your mortgage is an everyday item. That is, you think about it almost every day…..
Could Ya!
Now, this is where it gets interesting. Not everybody that should switch will be able to. The process of switching mortgage providers is very similar as applying for a new mortgage, whilst, the terms and condition of a new application are not exactly the same as a swither application allot of the lending criteria is the same.
So, things like
- Your Age
- Your employment or self-employment
- Your income
- Your credit history
- The value of your property versus the outstanding balance of your mortgage
All have a bearing on whether switching is an option for you or not.
The only way to really know if “Could Ya!” is an option is to talk to someone that can help you figure it out. Give us a call at 074 910 3938
Would Ya!
That is, would ya be bothered? The hassle of it all.
A question for you.
If you had a hole in your pocket and you were losing, let’s say, €5o per month out of this hole. Would stop using the pocket and get it mended or continue to use it and continue to lose money? I think not…
So, why would you continue to lose money with your mortgage repayments?
We suggest that a little hassle is worth enduring, if, savings can be made and importantly, it is the right decision after taking advice. Why continue to pay more than you need to?
We are happy to help you through the process, to make it easier.
What about the cost of switching?
A few lenders, not all, are offering “Cash Back”. This will help cover some of the initial outlay of moving to a new provider. Again, advice is needed as not all Cash Back offers are the same, and not all offer long-term value for money.
Approach cashback offers with caution
These cashback offers may look irresistible however, what will provide a short-term financial gain may lead to long-term repayment pain. Again advice is needed. The cash back offers can be a good idea.
Take Action
Our advice is to get advice to help you to:
- Educate yourself on whether switching is an option for you or not.
- Look at the pros & cons of switching or not
- Help you figure out whether it is a good idea to switch or not.
Call us today in Letterkenny: 074 910 3938
Warning: If you do not keep up your repayments you may lose your home
Warning: You may have to pay charges if you pay off a fixed-rate loan early.
Warning: The cost of your monthly repayments may increase.
Warning: If you do not meet the repayments on your loan, your account will go into arrears.
Get Advice
Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.
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