More people are switching mortgages

More and more, people who have mortgages consider the process of switching lenders, as the long term savings can be quite significant. At present, banks advertise various “sweeteners” for borrowers to switch mortgages.

What does this all involve?

When a borrower is a on a variable mortgage rate, this generally means that they can switch mortgage provider at any time and there will be no penalty for doing so. If a borrower has just left a fixed term and is considering either fixing the rate again for another period, or checking both fixed and variable rates generally, it is always a good idea to compare different lenders’ rates. As regards whether to fix the rate of a mortgage or not, and for how long if fixing the rate, this is a decision you should make based on your own circumstances and plans for the future.

If you do decide to switch mortgage providers, the following are some considerations to take on board –

1. You will need to obtain a valuation of the property for the new lender, which you must pay upfront. This is required so that the new lender can calculate the loan to value rate when issuing the letter of loan offer.

2. You will also need to furnish various documents to the new lender before the letter of loan offer can issue. While this might seem like a lot of work at the time, it is worth remembering at this point that, in the long run, you will hopefully be saving money.

3. You will need to authorise your solicitor in writing to obtain the deeds from your current lender to review them in advance of drawing down the new loan and repaying the current one.

4. On receipt of the title deeds, the solicitor then carries out a full title review of the property, including a planning search against the property. At this stage if you have carried out any works requiring planning permission, or works that are significant but exempt from planning permission which would require a certificate of exemption, you will need to furnish all of the documents required (copies of planning permissions, certificates of compliance with planning permission and building regulations, or certificates of exemption).

5. Local Property Tax should be paid up to date as this is considered a liability on the property, just like any other charge, and evidence of this is required.

6. There are various documents which you are required to sign in the presence of your solicitor. You also separately must ensure that your life policy and building insurance documentation are in order and acceptable to your new lender, and the benefit of these are assigned to the new lender in the usual way.

7. Before drawing down the new mortgage, the redemption figures are obtained for the current mortgage and searches are carried out by the solicitor against the property and your names. When the new mortgage funds are drawn down by the solicitor, the existing mortgage is redeemed, and the solicitor then attends to the paperwork involved in discharging the old mortgage from the title deeds and registering the new one.

8. When the registration process is completed, the solicitor sends the deeds to the new lender, which is the final stage in the process.

While there is a lot involved in switching mortgages, the longterm savings are often worth it, so we would encourage readers to “shop around” to see what banks offer the best rates that would suit them.

THIS week the award-winning RTÉ One series, Building Ireland, visited the hydro-station at Turlough Hill.

The third series of the show sees architect Orla Murphy, engineer Tim Joyce and geographer Susan Hegarty searching for some of the hidden gems of Ireland’s building and engineering heritage.

The show airs each Thursday evening at 7 p.m. and this week’s episode featured Tim Joyce exploring Turlough Hill Pumping Station located in the Wicklow

Mountains.

Turlough Hill is Ireland’s only pumped storage power station.

Construction commenced in 1968, and the station became fully operational in 1974.

The station generates up to 292MW during peak demand periods by releasing water from its upper reservoir and allowing it to flow through its four turbines into a lower reservoir.

During periods of lower demand the water is pumped back to the upper reservoir ready to be used again.

For the Building Ireland episode, Tim and his team of experts investigated how the reservoir feeds an underground hydro-electric power station – and vice versa.

The Power Station was created in an area of environment and tourism sensitivity, in the days before renewable energy systems had even entered the vocabulary.

The episode is still available on RTE Player for viewings.