Remortgage Guide
When you originally took out your current mortgage you were probably offered a discount
interest rate or some other form of incentive. This low, fixed interest rate only
lasts for so many years though before reverting to the lender’s standard or typical
interest rate. When this happens it is time to compare the mortgage market and find
another budget deal.
The Main Qualifying Criteria for remortgaging
Providing you haven’t developed a low credit score, been declared bankrupt, suffered
with mortgage arrears or deferred repayments since you took out your mortgage then
you shouldn’t have a problem remortgaging. There are plenty of lenders still willing
to lend on properties and if you have equity in your home you can borrow a little
extra to help with the credit crunch. The various comparison websites are a great
place to start looking as they outline all of the important factors to consider.
Comparing the Introductory Offers
The main reason for remortgaging is to keep the rate of interest you’re paying as
low as possible. With this in mind APRs are a good place to start with regards to
your comparison. Because of the current financial climate and the fact that the
Bank of England base rate keeps falling, the mortgage lenders are all offering attractive
APRs to catch your interest.
Before deciding on one though make sure you read the terms and conditions. Check
how long the discount interest rate runs for, if it is fixed or variable, and how
much the arrangement fees are going to be. Most lenders with really low interest
rates often have very high arrangement fees and in the long run this cancels out
any savings you make on your interest payments.
Comparing the Additional Benefits
If you manage to find a number of mortgages that are offering the same low APR then
you should compare any additional benefits as well. These include things like the
ability to make over payments and lump sum payments to your account and to ask for
a repayment holiday. There may also be a cash-back incentive on offer as well which
is also worth taking into consideration.
Comparing the Fees and Charges
These are considered by some to be the downfall of remortgages. This is because
most lenders charge a large arrangement fee when setting the account up and another
fee if you swap to another lender before the end of the discount term. These early
redemption fees can run to thousands of pounds on large mortgages and they effectively
tie you to your lender for a specified number of years. For this reason it is vital
that you compare the available products thoroughly and choose the best one for you
in the long run.