Whether you want to insulate yourself from the possibility of a rise in the Bank of England base rate, are considering doing some home improvement or you simply want to move your borrowing to a better deal, there are all sorts of reasons why you might be considering remortgaging your home.
But with the Financial Times, Your Money and The Guardian all reporting this week that the interest rate may well rise in August, ensuring you’re getting the right deal is absolutely vital.
So, if you’re thinking about changing the way you finance the roof over your head in the immediate future, here are some things you should consider:
How much is your home worth?
Whilst it might seem easy to compare like-for-like properties on Right Move or Zoopla, those apps won’t be able to take into account the unique selling points – or, in some cases, barriers to sale – that may affect the value of your specific property.
Ask two or three estate agents to come and value your property and use that information to come up with what you consider to be an accurate and realistic value. Remember that the more your home is worth, the lower your loan-to-value (LTV) will be – and in the majority of cases, the less you have to borrow, the lower your repayments will be.
Staying with your current lender isn’t necessarily the right choice
Although it’s not that long ago that keeping your remortgaging with the same bank or building society was common, it can now pay to explore the market to find the best deals. Although there are price comparison websites that can give you an idea of what’s available, it’s worth considering talking to a specialist mortgage broker who may often have access to products that aren’t available online or on the High Street.
Are small savings on interest rates worth the upheaval of moving your loan?
From a purely financial point of view, the answer is that in most cases it probably is. A mortgage is, more often than not, a long-term commitment over many years and so small savings each month can add up over the lifetime of the loan.
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.
But everyone’s circumstances are different and whether moving a mortgage is the right choice for any given individual depends on a number of different factors that might not be related solely to personal finance. Again, consider getting advice to find out if remortgaging is the right option for your circumstances.
Keep an eye on the remortgaging fees
Of course, interest rates are an important consideration when you’re thinking about a significant long-term financial commitment. But it’s also wise to keep an eye on the upfront fees your prospective lender might charge to facilitate the loan and the costs you may incur through early repayment charges on your existing 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 remortgaging elsewhere.
What remortgaging advice is available?
Having professional advice when you’re weighing up your remortgaging options can be really useful. Professional mortgage brokers can charge a fee but because they may be able to access products and interest rates which are not available to the public, they may also be able to deliver a net saving on your new deal.
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, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.
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.