Looking to re-mortgage?

Many people are reluctant to consider the option of re-mortgaging given the current financial crisis, but it is something that everyone should keep in mind as there can be considerable savings to be made. Here are some thoughts when considering re-mortgaging:

In debt and fiancial crisis1: Plan ahead – for those on a fixed term deal, keep in mind when your current package comes to an end and begin looking for alternatives a few months in advance. Securing a mortgage can be a lengthy process and making tracks in advance can be advantageous in making sure you get the right deal and at the right time.

2: Shop around for the right deal – The rise of comparison websites allows easy access to view a large number of varying types of mortgages and their specific terms and conditions. Remember that what looks like a very small percentage difference can amount to a very large monetary difference over the term of the loan – make sure all the information is given to you in plain and simple, and easy to understand, terms.

3: Once you find the right deal, make sure you secure it as the recent turmoil in the financial industry has seen lenders resort to withdrawing deals at very short notice.

4: Use any spare funds to reduce the level of your mortgage, this not only gives lenders the impression of willingness to reduce the debt but reduces the capital that the interest calculation and repayment is based upon. Overpayments can be a very good idea, especially with the mortgage interest rates as they currently stand. This can allow a buffer if difficulties are encountered when making repayments and can also drastically reduce the term of your mortgage.

5: Beware of standard variable rates – otherwise known as SVR – as these can be somewhat higher than a fixed rate offer from the same lender.

6: In the current economic climate it may be worthwhile investigating a tracker mortgage. Many believe that the Bank of England will continue to reduce rates in the coming months, and should this happen a tracker will allow your interest repayment rate to fall with the baseline. This can be very lucrative if played correctly.

7: Speak to brokers and take advice, as people in the industry can have a different angle on the information that you may have been given. Do not be afraid to ask many different sources for advice and make sure that they are suitably qualified orgainisations or individuals.

8: Take into account redemption fees, those which are payable on early completion or changing a mortgage. Different lenders have different fees, and sometimes these can be very high indeed. Be sure to check whether your new mortgage deal is not restricted by a high redemption fee or that you are tying yourself to a deal for longer than you wish.

Looking for a re-mortgage deal can be a sensible move and hope some of above basic points have helped. Seek expert advice whenever you are unsure as this is often free and carries no obligation.

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