Thinking of Switching Your Mortgage? Let’s See if it Makes Sense!

These are very interesting times that we currently live in, to say the least. With that, of course, comes a desire to change with them for cost-saving or future-planning reasons. I see it all the time in the clients who come to me for assistance with their mortgages. Lately, quite a few of them have been switching to take advantage of the best possible rates, lower minimum monthly payments during lean economic times, and otherwise. If you too are considering a mortgage switch, never fear – I’m happy to help you in any way I can with my years of expertise in the industry. 

To get started, let’s go over some key pointers you should first consider before taking any big steps. 

Plan Ahead – in Every Possible Way!

This might sound a tad cliché but it’s true: if you switch over to a different mortgage and end up facing a financial or health complication down the road, you need to ensure you can manage payments without any added stress (that point sort of ties into the whole health aspect, ironically). Whether an unexpected pregnancy, loss of a primary breadwinner, divorce or otherwise, it’s important to plan for every eventuality even if it’s not one you want to think about. That way, you’ll have one less thing to worry about – and peace of mind in knowing your mortgage is manageable. You may wish to also consider term life insurance, which won’t decrease in coverage payout as your owing amount goes down.

Familiarize Yourself with the Fees Before Switching

I’ve seen plenty of homeowners come to me worried about the costs associated with switching mortgages in the first place. While I’m happy to provide absolute clarity and assurance of exactly what they will be, it’s still a good idea to do your research before committing to such a change. I can easily back you up and make recommendations based on the latest changes to rates, plans, lender and governmental policies, and otherwise, but here are a few to jot down and keep an eye on in case they fluctuate:

• Appraisal fees (ideally covered by the lender)
• Penalties related to interest or making alterations to your mortgage early
• Title fees or other legal expenses
• Administrative charges (taxes, discharge fees, etc.)

What Term Type Do You Have?

Closed-term mortgages are the ones where you may need to pay more for switching over, as you are effectively “breaking” a stricter agreement. With that said, there’s a silver lining: if you’re up for renewal, you won’t have to pay as much. On the flip side, open mortgage terms are what they sound like on the tin. They’re more flexible and adaptive to change, so fees such as interest penalties shouldn’t apply if you have one. 

What Are You Gaining from Switching Now? Is it More Sensible to Wait?

Perhaps another lender is offering a special incentive for mortgage switching that makes you want to throw your wallet at them with glee. Alternatively, maybe you’re feeling burned by your current agreement when comparing against current market rates. If you’re thinking of switching your mortgage, there are plenty of reasons to do so, but there are also some reasons it’s better to wait. Perhaps the market is only starting to decline in terms of rates, or maybe a specific lender is known to implement even more lucrative switching deals later in the year. Alternatively, you may not be up for renewal yet and want to wait it out to lessen the bite of those pesky fees we talked about.

If you’re interested in learning more about switching your mortgage, I’m happy to help you dig into the nitty-gritty of it – and take the hard work of setting it up off your shoulders. With my years of practical expertise and connections with some excellent, respected lenders, we can be a winning team together. Let’s get in touch and chat about your plans.