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How to Modify Mortgage Loans
By admin | August 15, 2011
So you want to modify your mortgage? Depending on with who and how it was originally set up, your mortgage lender will be able to answer specific questions you have about how to modify a mortgage. Here are the most commons ways in which you can modify a mortgage.
Re-fixing your Fixed Rate Mortgage
Mortgage Loan
The rate of interest on a mortgage, although only a small looking percentage, holds dramatic power over your repayment amounts. Many first time borrowers opt for a fixed rate mortgage offering a set interest rate over 3 years. Before or when the 3 years are up, you may wish to re-fix on a different interest rate, presumably one that will decrease your repayments. There are usually fees associated with this process, but if the move offers a significant reduction in your repayments, it can be incredibly worthwhile.
Move your mortgage to or from a Fixed Rate, Variable Rate or Split Rate Mortgage
If interest rates are increasingly sliding, you may wish to move from a fixed rate to a variable rate, allowing you to directly benefit from falling interest rates. The risk is obviously that the rate could rise as well as fall. Some lenders will offer a split rate mortgage, allowing part of the interest charged to be fixed, while another part is allowed to vary. This can offer a slightly reduced risk from a full variable rate. If you are wishing to alter a fixed rate mortgage to another option, there could be a fee if you are modifying prior to the end of the fixed rate term.
Moving Home
Most lenders will not have a problem modifying your mortgage should you wish to move home. Some will even waive some of the set up fees associated with a new mortgage if you are an existing customer.
Making Lump Sum Payments or Paying Off Early
There is usually a limit to how much of a mortgage you can pay off early without incurring a fee. It is a good idea to calculate how much the fee represents compared to the interest you are likely to incur by continuing with your agreed payment cycle.
How to Modify Mortgage Loans
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