Remortgage and Save By Bringing Your Monthly Goings Down With a Better Interest Rate

A remortgage can help you to save money. A remortgage is when you change your mortgage to a new mortgage product, often onto a better deal that will put you in a better financial position. People are attracted to them because they can often also borrow additional funds.

Some people remortgage simply to get a lower rate of interest, while others want to raise additional funds for home improvements or to buy another property. Perhaps if your circumstances have changed and your earnings have increased or decreased, you may be able to find a different mortgage contract that is more suited to your new lifestyle.

One of the great things about a remortgage is that by lowering your interest rate, you will generally also be lowering your monthly outgoings, so it can save a lot of money in the short and long term. But in order to get a good deal, you’ll need to research the market to fish out the most competitive deals.

There are hundreds of remortgage deals available with dozens of lenders and so finding the right rate can be tough.  Seeking professional advice can help you find the right deal, and a financial advisor or mortgage broker can also explain the various costs involved in the remortgage process.  These may include valuation fees, arrangement fees and conveyancing charges.

You should always approach your existing mortgage provider first, to see what remortgage deals they can offer to you. This will give you a point of reference when comparing to other lenders. As your lender will want to keep your mortgage with them, they may be able to offer you special rates to keep you with them.

This may be the case, for example, if you need a mortgage for more than 75 per cent of the value of your home.  The rates on these deals tend to be higher than other products and so you may find it hard to improve on your current deal in this situation. However, the situation is improving, and the Council of Mortgage Lenders recently reported that remortgage approvals in February 2011 were the highest for over two years.

For instance, there are only a few remortgage deals out there right now for people who want to  take on higher risk and borrow more than 75% of their homes value. If this applies to you, you might have to accept that it might be harder to improve your current deal; you may even wish to modify your plans. The remortgage market is gradually improving however; according to a recent report by the Council of Mortgage Lenders. It showed that remortgage approvals in February 2011 were the highest for more than two years.

Many people prefer to arrange their mortgage on a repayment basis as this ensures that the loan is repaid in full over the mortgage term. If this is your preferred option, you can then begin to research the best remortgage rates in the market. Deals change regularly and so using a mortgage broker can help you keep track of all the best rates.

You should always look at the total cost of the mortgage, which can easily be compared using the mortgage quotes that you are given. Of course, mortgage brokers again can compare this is seconds using software. This is important because high product fees and other costs can actually make a product with a lower interest rate more expensive in the long run.

Don’t forget to look at the whole cost of the remortgaging package, not just the interest rate, as this can make the difference as to whether it is viable to go through the process or not. Finally, watch out for fluctuations in the market that occur at regular intervals. Deals change quickly, so the top deal you get today may be bottom of the pile in six months.

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