Once you secure a mortgage loan, it can be tempting to ‘set and forget’ it. However, it pays to evaluate and shop around regularly, especially if your circumstances change.
This is one of the biggest purchases you’ll ever make, so it’s important to ensure you get, and keep getting, the best rates possible for the life of the loan.
If your circumstances or rates changed, your fixed-rate period ends, you incurred other debts, spoke to a broker or need additional funds, reviewing your mortgage is a good idea. We’ve outlined some helpful steps to assist with reviewing your mortgage quickly and easily.
1. Assess your current loan
Take a good look at your current home loan. This will give you a starting point to compare other mortgage options against and find the best rate. Consider your current loan’s strengths, weaknesses and interest rates compared to other loans. You also want to understand your options like debt consolidation or accessing the equity.
2. Compare mortgage options
When you understand what you want out of your new mortgage loan, you can start comparing various mortgage loans. You can do this with the help of a mortgage broker or find an online comparison site to do it on your own. A broker is better equipped to find a loan that you can tailor to your situation, but you have more freedom comparing loans on your own.
3. Calculate your costs
If you choose to close out your current loan, you will want to consider any closing costs you may incur and any upfront costs you might have to pay with your new loan. Your fees can change depending on whether or not you plan on staying with your current lender or switching to a different one.
4. Apply for your new mortgage
You’ll have to submit your application to the lender once you’ve selected your new mortgage. You can submit it through your broker, over the phone or in-person. You may have to supply your financial history, proof of identity, and other information if it’s with a new lender, so have it handy.
5. House valuation
Pre-approval for your new loan will typically take around a week. During this week, the lender will perform a property valuation. This will help them figure out exactly how much your property is worth and your equity within it.
The final step is when the lender approves you for your new loan. They’ll typically send you a mortgage package that includes your mortgage contract, direct debit forms, terms and conditions, mortgage of land forms and a discharge form.
Whilst you may not need to change or update your loan every year, getting into the habit of conducting a quick review annually will help to ensure that your mortgage still serves your best interests and suits your situation well into the future.
Please note, this article is intended as a guide only. The mortgage review process may vary from lender to lender and Achieve Homes assumes no responsibility for individual experiences.