The Top Remortgage Considerations
There are periods throughout our lives when interest rates reach low points. When this happens, there is often a plentiful supply of great mortgage deals on offer, which leads to many attempting to remortgage.
It’s important to understand, however, that there are certain considerations to keep in mind when attempting to remortgage your property. When it comes to the property market, there are often periods of instability, which has created a disparity between banks and lenders.
House prices constantly fluctuate, so it’s worth getting the opinions of multiple estate agents to get a proper valuation of your home. This is because the more that your home is actually worth, the lower your loan-to-value rate will be on your remortgage. This is how much you want to borrow as a percentage of the value of your home. So, the lower your loan-to-value rate is, the lower the interest rate you have to pay.
It’s probably worth noting that staying loyal to a current mortgage provider doesn’t actually do you any favours at all. The best thing you can do is take the time to look at other providers to try and get the best possible rate, because there’s no guarantee you’ll get a good deal, in fact you may be charged more. Some people can save up to £300 a year by switching to a different provider, which makes a big difference over the course of a 25 to 30 year mortgage.
Furthermore, small savings can add up quite a bit over that period of time.
Another thing to consider when mortgaging is if your current provider is offering 1.5% interest on a loan, but the best current rate with a different provider is 1.2% interest, then it’s worth taking the time to switch and save nearly £700 in a few years.
You should definitely be cautious about the fees that you get charged from a provider. Interest rates are important to think about, but there are some providers that offer mortgage deals that have a lower rate, but then charge a large fee to protect themselves. The overall effect of the fees will depend on the size of the fee itself. If you had a large mortgage, for example, it might be worth negotiating with a large company and paying a slightly higher fee for a lower overall interest rate.
As is the case with something like a current mortgage, remortgage is a massive financial commitment.
If you’re going to do so, that’s absolutely fine, but you just need to seek out independent advice to get the best results.
For example, you might expect to pay between £200 and £500 to seek out the services of a mortgage broker. However, the assistance that they provide you when it comes to navigating the market, finding the best deals, and getting accepted for a remortgage as well worth the one-time payment. If you’re going to do things, you may as well do it properly, and a mortgage broker has a strong reputation for helping people to save much more money from the deal long-term.
