The coronavirus pandemic and the economic impact of lockdown have meant many people who were perhaps thinking of moving during 2020 have been forced to review their plans and re-evaluate their needs.
While the sudden shutdown of much of the UK’s economy has in some respects prompted favourable lending conditions – the Bank of England base rate is at an all-time low and that’s reflected in many of the mortgage products currently available – uncertainty over job security has inevitably led to uncertainty about long-term affordability for some would-be buyers.
But if you were considering moving but have put those plans on hold indefinitely, it’s still worth considering your other options – especially remortgaging.
There are a number of reasons why you might want to think about reviewing the existing mortgage arrangement on your property.
- It may be that you can extend or improve your current home to meet short- or medium-term needs until there’s more clarity over the health of the economy;
- You might want to take advantage of lower interest rates to reduce your monthly repayments
- Or you may simply want to future-proof yourself with a fixed-term product
So what’s the best way to assess your needs? Here are our 5 steps to stress-free remortgaging:
- Get your home valued
Don’t rely on similar properties that you may find on RightMove or Zoopla, even if they’re in the same location. Your home may have unique selling points – or, in some cases, barriers to sale – that could affect the value of your specific property.
Get a valuation from two or three local estate agents who know the market to reach a realistic value for your house. The more your home is worth, the lower your loan-to-value (LTV) and therefore repayments are likely to be.
- Don’t necessarily stick with your current lender
The days of the same lender holding the mortgage on your property are long gone and you may be able to save money by moving to a different lender.
We would always advise that you speak to a professional mortgage adviser who may be able to access products that aren’t available online or on the High Street.
- Make sure any potential saving justifies the rigmarole of moving your loan
In most cases you will probably save a significant amount by remortgaging your property, but if you move to a new lender you will have to go through a full application process (and even your current lender may insist on this, depending on their policies regarding existing customers). A
You need to look at the whole loan rather than your repayments alone to gauge your savings as even a small saving each month can amount to a significant financial benefit over the life of the loan – especially if you’re likely to have the mortgage for many years.
As an example, if you were able to save an average of just £35 a month by switching a 20-year loan, you’d be just under £8,400 better off by the time you make the final payment. That’s money you could use to go on holiday, buy a car or just celebrate being mortgage-free.
Again, consider getting professional advice to find out if remortgaging is the right option for your circumstances.
- Pay attention to product fees and penalties
Interest rates may well be your key focus when it comes to remortgaging, but make sure you don’t get caught out by any fees your proposed or existing lender may charge. These may include arrangement fees or early exit penalties that your existing lender may charge, depending on the terms of your existing loan. mortgage.
The mortgage market is competitive and there are attractive rates to be found, but they need to be considered in the context of the overall financial benefit – or not – of moving your mortgage elsewhere.
- Get professional advice
Having professional advice when you’re weighing up your remortgage options can be really useful.
Many mortgage brokers charge a fee – usually up to £500 for a successful mortgage application – but because they may be able to access products and interest rates which are not available to the public, that fee may well be offset by the money you save on repayments if, like us, your broker has access to preferential products and rates that can’t be found online or on the High Street.
To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, give us a call on 020 7371 5063.
Please note: all information contained in this article was accurate at time of publication
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.