I’m regularly asked by Mumblers about their remortgage options and thought I would write a quick blog on why now could be a good time to look at remortgaging.
If you’re on your lenders standard variable rate or your current deal is about to come to an end there are a number of compelling reasons why remortgaging could be a good option for you:
Interest rates available for mortgages are still very low. The interest rate your borrowing is on is what effects how much you pay each month and now could be a great time to take advantage of the low rates available. It still remains a case of when rather than if the Bank of England will start to increase interest rates. It could be a good idea to take advantage of the current low rates and fix to avoid the uncertainty of future rate rises.
The value of your home has hopefully increased. Anyone thinking of selling their home will have considered the effect the recent rise in house prices will have had on them, but it’s just as important for those of you who are planning on staying put. In simple terms as the value of your home increases so does the amount of equity you have in it, the more equity you have the lower the rate you will pay on your new mortgage. If you stay with your existing lender they may not take the current value of your home into account when offering you a new deal. By remortgaging to another lender they will send a valuer out and base their decision on its current value, not what you paid for it 2, 3 or 5 years ago.
It is possible to remortgage to a new lender without any fees being paid upfront or added to the loan, and some lenders even offer you cashback on completion. It’s a sad fact that many lenders offer the best rates to new customers rather than their existing customers but you can use this to your advantage by shopping around. Speak to a market mortgage advisor and they will be able to advise you on the best option for you.
However it isn’t right for everyone. If you are thinking of moving house in the near future then tying yourself in to a new lender may not make sense. There is one major disadvantage of remortgaging your home and that is incurring early payment charges – known as an Early Redemption Charge – for paying off your current mortgage. This is very typical if you have a fixed, capped, or discounted rate mortgage, so it is up to you to refer to your current mortgage terms and conditions to find out whether or not you will be charged for paying off the loan early. They are usually only applicable during the introductory period of your mortgage. A mortgage advisor can help you here.
If you’d like to get in touch to find out any more about re-mortgaging, moving home or what your options might be then please feel free to email me at [email protected] or call 07810108165. I’m still happy to offer my services to Mumblers without charging our usual broker fee and will come to meet you in your own home at a convenient time. So to find out what your options are won’t cost you a thing (except maybe a cup of tea and a biscuit.)
Your home may be repossessed if you do not keep up repayments on your mortgage.