Remortgages

Over recent months many people have decided to try and remortgage, having found that the cost of their existing mortgage is quickly spiralling out of control. Many of those that are thinking of remortgaging over the course of this year include homeowners on cheap fixed rate mortgages that are due to come to an end. If you are in this situation you could end up being switched to your lender’s expensive standard variable rate once your fixed rate period expires unless you can find a suitable and affordable remortgage.

It is best to start looking at remortgage packages as early as possible, as this will give you the best chance of finding an affordable deal. You should bear in mind that the cost of borrowing has been rising despite recent cuts in the base rate, and therefore you may find that interest rates on new mortgages are still higher than you may have expected. However, there are ways in which you can try and reduce the cost of borrowing in order to ensure that your monthly repayments remain affordable and you do not risk losing your home.

If you have decent credit then you have a far better chance of getting a competitive deal on your remortgage, so it is a good idea to try and keep your credit in check by ensuring that all bills, debts, and other financial commitments are paid in a responsible and timely manner. You will also find that many lenders will reserve their best rates for those that are able to put down a sizeable deposit on the mortgage, such as HSBC, which offered its rate matcher mortgage to those due to come of cheap fixed rates as long as they were able to put down a deposit of at least 40%.

There are other steps that you need to take in order to ensure that you get the most affordable deal on a remortgage. For example, you should take the time to research the market and compare different remortgage loans from a range of lenders rather than opting for the first one you come across. Interest rates can vary widely from one lender to another, so a little research could potentially save you a lot of money. Also, consider whether you want to go through a broker or whether you might find a better deal direct from a lender. A number of lenders have recently announced that they are reducing the rates on some mortgages if they are taken direct, so again you should do your research and compare the difference in cost when you go direct compared to when you go through a broker or other mortgage intermediary.

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The repayment terms offered on the remortgage are also important, as this will determine what your monthly repayments will be. The longer the repayment period offered the longer you will have to repay your mortgage loan and the lower your monthly repayments will be.