Will I be able to switch to a regular mortgage soon?
Bad credit mortgage’s, in which a person has been able to consolidate all their debt into one lower monthly payment, are designed to also help you repair your credit over a period of time. If you have been resolute in your monthly payments, and resisted the urge to take out more loans then your credit score will reflect that.
You should see an improvement in scores with the credit reference agencies; this could enable you to switch to a regular mortgage.
Financial Stability – Should I now Switch?
If your financial outlook has changed because you have a better level of income and you are easily meeting your monthly payments, you need to consider a few things before jumping into a standard mortgage.
Ask yourself a few questions:
• Can I turn a bad credit mortgage into a standard mortgage? – Will I be selling my home in the future?
• Am I able to save some money with my current mortgage?
• Am I able to enjoy life a little more with the extra money every month?
• Is shifting my mortgage company really going to improve things that much?
Unless you are going to dramatically reduce your monthly payments and greatly reduce the number of years to pay off your mortgage, then it is probably not beneficial to you to move on. If something is not broken do not fix it!
If you are selling your house in the future and wish to pay off your mortgage that way, then consider staying with your current lender. Especially if you have been with them so long that you have no early payment penalties.
If you are able to save money, and still enjoy a few of life’s freedoms, then again unless you will reduce your payments by at least $100 – $150 per month with a shorter payment term and no redemption penalty, you should not consider it.
If you feel that a change will vastly improve your finances and long term payment schedule, then you should go for it. It may be beneficial at this time to seek the advice of an independent financial advisor.
*Affects pricing. With the No Closing Cost
Option, borrowers finance the closing costs instead of paying for them at
closing. Borrowers who pay closing costs at closing may qualify for a lower
interest rate. Some upfront fees (ex. credit report and appraisal) may apply
and may be credited at closing.
*Refinancing or taking out a home equity loan or line of credit may increase
the total number of monthly payments and the total amount paid when compared to
your current situation.
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