With enquiries for remortgaging seemingly on the increase here are 7 key things you need to check to ensure you obtain the best deal.
1. Make sure you check the small print on your current deal
It’s no good arranging a remortgage if it will cost you money to get out of your current deal. Many deals have exit penalties that continue long after the fixed or discounted period, so check your paperwork or ring your lender to make sure you avoid any charges.
2. Don’t try and forecast future interest rates
We are all notoriously bad at forecasting the future, so don’t even try. If you are looking for a fixed rate then you should be doing so to fix your mortgage payments over a period, not trying to make a killing on the interest rate. Lenders are experts in this field so look on them like bookies – they set the odds and they very rarely lose.
3. Check all the fees before going ahead
There will be fees payable when you remortgage – booking fee, arrangement fee, survey fee and legal costs. make sure you get a complete picture of these costs so that you can make the proper judgment on whether a particular deal is best for you .
4. Don’t burn your bridges
If you are looking to change lenders then make sure your proposed new lender will actually lend you the money you need. All lenders are happy to quote you for a mortgage but getting them to part with their money may be a more difficult task. Credit and employment checks may result in your new lender reducing the amount of money they are prepared to lend, taking a much different view than your current lender did a few years ago. Remember the mortgage market has changed dramatically over the last few years and the crazy lending days before the credit crunch are now long gone.
5. Make sure you know what will happen after the deal period expires
You will probably be attracted by a special offer, either a discounted or fixed deal, that will save you money. However, make sure you check what happens when this introductory deal finishes as things may change dramatically. All lenders will provide you details on how the interest rate will be calculated after the special offer ends and make sure that this will still be affordable.
6. Check whether you can make overpayments
There may be times in the future when you want to pay a lump sum off your mortgage to help reduce the term. You need to check your proposed new mortgage deal to make sure overpayment is allowed and if so is there is any annual limit.
7. Is your mortgage portable?
What happens if you want to move house in the next few years and can you move your mortgage deal on to a new property? Some lenders do not permit this type of transfer or if they do they will charge a fee for the service.
If you check the 7 things above then you are well on your way to getting a good remortgage deal and not end up wondering why you bothered at all.