Tips to help you save money when your re-mortgage is due...
So it's getting to the end of your term and you're now faced with the decision of whether to re-mortgage with the same lender or find a new one... In this blog we highlight some tips and advice to help you when the time comes to re-mortgage your home.
Why re-mortgage?
People re-mortgage to ensure they have the best fixed mortgage deal on the market for their personal criteria. Often at the end of the fixed term of a mortgage the monthly payments will spike as you move onto a standard variable. You can find details of this in your current mortgage offer.
Re-mortgaging can be between different banks/lenders or your current lender, if you choose to stay with them. It is important to note you can pay an arrangement fee when you re-mortgage (circa £1,000-£1,500 on average in this area), so ask your IFA which ones are cheapest or free to arrange. Also note that if you always do a 2 year fixed mortgage deal you will pay the same amount of the arrangement fee every two years… Over a 30 year window you could be paying £15k-£20k, just in fee’s.
Also be aware if you are changing lenders there will be legal work involved, which takes time. Our advice is to start thinking about your plan 4 months before the end of the term and talk to a mortgage adviser 3 months prior. This should mean a deal is in place and you don’t risk a month on the (higher charged) standard variable.
If you have been living in the property for a while, completed some refurbishment work or the market has increased, then you might also find you are in a new loan to value bracket (LTV). The lower the LTV, the better the deal. These lower interest rate brackets normally work in 5% chucks from 95% mortgages down to 75% and then to 60% and below.
If you think your property has gone up in value then ask what the lenders ‘desktop valuation’ is. This is their online calculation. If you think it’s much lower than it should be and your mortgage broker says a significant difference could change the LTV bracket, then it may be worth paying for a new mortgage valuation to be done. This will often cost between £250-£500. But if it saves you 60/80/100 pounds a month over 3 years; then it’s worthwhile.
Hopefully some of these tips and advice will help. Please note we are estate agents with a lot of property experience, but we are not financial advisers… We do however work with 9 local advisers who we highly recommend and most of them do our own mortgages too. If you want to ask one of them a question or arrange a chat, we would be more than happy to set up an introduction for you. Use the ‘Get in touch’ box to the side (desktop) or at the bottom of the screen (mobile).
Thank you for reading the blog, we hope you found it helpful. If you are planning to move instead of re-mortgage, then feel free to use this link to get an instant valuation for your home.