When it comes to mortgages, the different options available on the market can sometimes seem somewhat overwhelming and complex. This is why quite a few people end up sticking with their existing mortgage until they have made all the repayments necessary.
There can however actually be quite a few advantages to switching mortgages, as often you might find a better deal or a better lender that will help you financially in the long run. Some people may start out on a great deal, but then find the lender’s SVR is too much, whereas others may need to change to a more flexible mortgage to suit a different lifestyle.
Remortgaging could save you hundreds of pounds and is a brilliant way to cut costs, but it isn’t always straightforward, so it is important that you know what obstacles you may face during the process.
If you are thinking about remortgaging your property, here’s what you need to think about first:
Time Scale
Remortgaging is in no way a speedy process, and the chances are that it could take a lot longer than you initially expect. If you feel impatient or just want to get the whole thing done quickly, then just think about the money you will save for just having to wait a few weeks.
The first thing you need to do is to get in touch with your current lender and see what deals they may have available. By sticking with the same lender, you may save on fees and the whole process may also be quicker.
Once you have an offer from your existing lender, then you need to compare it against those available from other mortgage providers. Doing your research and checking out different lenders will take time, but it will be worth it to get the best deal.
Costs
Anyone who has a mortgage will be aware that there are different types of fees involved with mortgage applications, but they may not realise that the same fees could apply when it comes to remortgaging.
The likelihood is, if you are changing mortgage deals, you will need to pay an exit fee, which can often set you back a few hundred pounds. Make sure you check the terms and conditions set by your current lender and find out how much it will cost you to change.
Once you have covered your exit fee, you will then need to think about your application fee. This could cost you up to £2000, so may mean remortgaging isn’t actually beneficial to you.
There is a chance you could find a fee free mortgage deal, but the likelihood is that they will compensate for the lack of fees with a higher interest rate, so don’t be fooled. Another significant cost will come from the solicitor’s fees, and of course you will also need to have your property surveyed, even though you aren’t moving.
Extras
Be aware that the majority of banks and lenders will take advantage of any remortgage application and see it as a great opportunity to sell you more services and products, such as building insurance and payment protection insurance.
They may also try and sell you emergency services cover and a range of other different policies, but you need to make sure they don’t pressure you into buying any services you don’t need.
Remortgaging may seem like a long-winded process with many different obstacles and potential problems along the way, but if you can find a great rate with flexible payments that suit your lifestyle, then it will definitely be worth it at the end of the day.
