Golden Rules of Remortgaging
I. Speak to your current lender
Before making any move, you need to talk with your current lender as to be well informed about your mortgage plan. Enquire about your noticeable payments and any charges that you may incur if you change your mortgage plan. Also know if there is any exit fee that you will be charged which is usually about 200 pounds.
If you do not remortgage you are bound to reverse to the Standard Variation Rate (SVR) of the lender. Find out more about this and compare it with your new deal. Always keep in mind that as the name states SVR is bound to go up or down depending on interest rates. If feel that you need some security ask your lender the deal they are willing to put on the table for a fixed rate remortgage plan.
II. Compare deals obtainable
Once you understand the terms of your lender you can now shop for better deals. Compare the remortgage plans obtainable from various lenders out there. Always know the deal that you want whether it is a fixed rate, tracker remortgage or any other deal.
When you have done the comparison, analyze your capability of paying high upfront fees and whether there are flexible features that give an allowance of an overpayment or underpayment. Be well aware of the possible market value of your home so as to work out the loan – value ratios that will assist you choose the remortgage plan.
III. Do your calculations
It makes sense to calculate the repayments that will be made each month adding to the fees or charges that you will incur. If there is any money refunded back to you by the lender, you can deduct it from the total. You may find that the cheapest deal maybe more expensive if you put into account the true cost.
IV. What to do if rates rise
Remortgage plans like tracker and discount plans have rates that may rise or fall depending on the base rate. If you are not able to manager the interest rates you can always opt for fixed rates that are obtainable at reasonable costs.
V. Consult with a broker
What we see in the market for remortgages may not be all there is. A broker with experience is able to give you more insight and advice you the best deals that will suit your needs. Ensure first that the broker has been approved by the Financial Service Authority (FSA)
Due to the financial crunch in the UK, most of the lenders are taking it upon themselves to deal with their clients directly. In this case the brokers are not able to access all the best deals in the market.
Most of the products though are obtainable by the intermediary channels and advice from a specialized is very useful. This is because they have contacts of the lenders and can assist you in difficult circumstances so that your deal can go by. already with bad credit a broker can be of service in helping you locate lenders willing to let you borrow as you work on improving your credit value so as to return to mainstream borrowing