When buying a home, many people spend a lot of time and effort shopping around for the best deal they can get on a mortgage. Yet, once the deal is signed, many never bother to check if their existing home loan is still the best option for them. If we are happy to change our internet service providers or favourite restaurants because we find a better deal or higher standards of service, then why shouldn’t we do the same with our home loan provider?
There are several potential advantages that can come from refinancing your home loan. Switching your loan to a different deal with your existing provider or moving to a new provider could save you money if lower interest rates are on offer. With home loan payments typically being the largest financial obligation for many, securing a lower interest rate to reduce these payments can make a big difference to your quality of life.
Also, keep in mind that if you bought your home some years ago, the difference between the amount you owe on your mortgage and the value of the property will be a lot lower than it was when you first took out the loan. This means that you might be in a lower loan-to-value (LTV) band, which is viewed as less risky and could make you eligible for better loan terms.
Even if you’re nearer the start of your home loan, shopping around could result in savings. This is especially true if you have been on a fixed rate for the initial period of your loan, which is now coming to an end. This is a good opportunity to see if the rates offered by your existing provider are still the most favourable available. If you have not been completely satisfied with the service provided this is also a good time to see if there are any better alternatives.
Of course, switching home loan provider does take some effort. You will need your notary to conduct an update of your searches, an updated valuation from an architect approved by your bank and an Energy Performance Certificate (EPC) to get your new mortgage. This process can be seen as time consuming and burdensome, resulting in many people being put off and sticking with their current deal. It’s therefore important to understand how the different banks operate and whether, like MeDirect, they make the effort to speed up this process by, for example, accepting documents digitally.
Despite the effort that may be required, keep in mind that refinancing your home loan is about ensuring your mortgage continues to meet your financial needs at the best possible terms. It’s a strategic move that requires careful consideration but can lead to substantial financial relief and stability.
MeDirect Bank (Malta) plc, company registration number C34125, is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994. Applications are subject to the Bank’s lending criteria. Terms and conditions apply and are available on request.