When your mortgage is in place, there are steps you can take to make sure it is always working best for you as well as it can. In this section, you'll find information about:

Reviewing your mortgage
Restructuring or switching lenders
Taking a mortgage holiday
Consolidating other debts into your mortgage
What to do if you can’t keep up your payments
What you do when you make your last payments

Making Lump Sum Payments

This is a possible option to reduce the amount of interest charge, also reducing the term of the loan. Increasing monthly payments towards reducing your mortgage balance could be an option financially.

Consulting with your lender on overpayment restrictions

It is also important to remember how some lenders charge interest. Some will charge yearly interest based on the total amount outstanding at the beginning of the year, although the loan is reducing monthly. Making those additional monthly overpayment will need to be carefully considerered. For example, assume that on the 1st January or on the anniversary of your loan, the mortgage balance is £300,000. One month later you, made an additional payment of £1000.00, so the balance would become £ 299,000.00. If the lender calculates interest annually, you will be charged interest on the £300,000.00. Therefore, making those additional monthly overpayments will need to be considered more carefully.

While your long-term focus of paying off the debt quickly will save you money. Life is always full of surprises and sometimes occur when least expected. Many employers, from time to time, go through a program of rationalisation (reducing staff), which could occur at any time.

How Safe Is Your Job?

Once you have injected lump sum money into your property, that money is locked up. It is not easy to gain access, retrieving any part of that money from your property will take time and, with no doubt, will attract some cost. How safe is your job? Are you able to pay your mortgage for at least 6 months if lose your job? Are likely to move in the future? If so, when your age are approaching retirement and you are unable to meet your mortgage payments in the future, your home could be reposessed

Review Your Mortgage

It's a good idea to check your level of repayments, your interest rate from time to time and many other factors involving this, should you have a fixed or discounted rate loan. These ought to be reviewed before the expiry date.

Restructing or Switching Lenders

Sometimes, changing the structure of your mortgage could save you money. You might switch some or all your loan from a variable rate to fixed rate, for example, or you might take your mortgage to another lender altogether.

You'll need to look at the costs and the possible savings carefully. Your existing lender, another lender, or a mortgage broker could help. Switching from one type of loan to another, with your existing lender, might come with a fee of a few hundred pounds, which you could try to negotiate down.

Switching your home loan to another lender may or may not cost a lot more, depending on the lender and the deal being offered based on your personal and financial circumstances.

Possible costs to consider include early repayment (redemption) fees. If your loan is on a fixed interest rate, a new lender might charge application fees: a legal bill and possibly a valuation bill, but you will not always face all of these.

To get your new business, a lender may waive its application fee and may not demand a valuation. Some may even pay for the necessary legal fees.

You could add up the costs, then look at the potential savings and work out how long it would take for these savings to cover the costs. If it would take a long time for the savings to outweigh the costs, be cautious. Other things, such as interest rates, could change in the meantime.

Your Last Payment

When you've paid off your home loan, it's fair enough to celebrate, but it is advisable to keep up the habit of setting money aside on a regular basis - ideally, at least the same amount as you were paying towards your mortgage. These savings could be used for your retirement. Also, if someone guaranteed your loan, you will need to make sure that the guarantee is cancelled when the loan is paid off.

And while you no longer owe anything on your mortgage, don't "discharge" it - that is, don't get rid of the legal security which the lender has over your home. If you ever want to borrow money in the future, you won't have to pay to set up the legal documents again if they're still in place

What If You Can't Keep Up Your Mortgage Payments?

If you're having trouble making ends meet, the first thing to do is to put together a budget to see where your money is going. You can use the Budget calculator. For personal advice, you could contact the National Debt Line. Free.

If you think you'll miss a mortgage payment, get in touch with the lender quickly. They can tell you what the options are. Depending on the type of mortgage, you might have to just pay the interest on the loan for a few months until you've got your finances back inorder.

If you have borrowed too much and the value of the property has fallen, you may find yourself in Negative Equity. This is where the money you owe is more than the home is worth.

If there is no way you can keep the mortgage going or you walk away from it, the lender may look to reposess your home to recover their money. In some cases the sale price could be lower than the market value or how much you owe the lender. Any money left over from the sale, after all the costs are paid, will be paid to you. If there's not enough money to repay the mortgage, the lender may take action to get the rest of the money from you.

To Summarise

In reviewing your mortgage, it is a good idea to check things such as your level of repayments or your interest rate from time to time. Should you have a fixed or discounted rate loan, these ought to be reviewed before the expiry date.