Well here is the Moneysprite 10 step guide to remortgages
If you are one of the 30% of mortgage holders, paying the standard variable rate (SVR), now is the time to review your deal. Potentially you could save a substantial amount on your monthly payments.
1. Check your existing deal
Are there any penalties? What rate are you paying? How many years are left on your term? How much is your home worth? What was the balance on your last annual statement? These are all important facts to have to hand, as they will determine the rate you are offered.
2. Is the SVR right for you?
Normally the SVR will be penalty free to exit. This can suit some mortgage holders, especially if they are planning to sell up soon. However there are also penalty free deals available, sometimes on much lower rates than the SVR. However with many SVRs northwards of 4%, the savings can be worthwhile.
3. What's on the market deal wise?
You can easily and quickly look at the deals available right on our website http://www.moneysprite.com/mortgage-best-buy-tables
4. Beware of fees!
Simply, the smaller the mortgage the bigger the impact of any lender fees to switch. e.g. if you have a £80k mortgage, a lender fee of £2k is unlikely to offer best value, no matter how low the rate. Your Moneysprite adviser will work out the figures to include any fees, ensuring you have the most suitable solution.
5. Will you be accepted?
Well this depends upon a host of factors. Ensuring you keep up to date with all credit commitments (this includes paying your credit card and mobile phone bill on time). Also avoid withdrawing cash on credit cards or payday loans - the lenders can see this. If you aren't sure about your credit history, check with Experian, the £2 statutory report is all you need.
Lenders will also look at your income and expenditure, to confirm the loan is affordable now and in the future. Lastly your property will need to be suitable security. An adviser will guide you to a suitable lender, once they've discussed all of these salient points.
6. How much will you save?
Well this depends on your current deal and mortgage balance. But also it's important to deduct any set up fees for the new mortgage. Your Moneysprite adviser will tell you not just how much you could save monthly, but also over the special deal period. They will also tell you if changing isn't the right thing for you at the moment.
7. Can a mortgage broker help?
Well we think so, but we are partisan! Whether you use a Moneysprite adviser, or another broker, they should know the criteria and rules of many different lenders, helping guide you to a successful outcome. At Moneysprite we have access to 50+ lenders and some exclusive products you won't find on the High Street. However do be aware there are a few lenders who only deal direct, so you may also need to do some checking yourself.
8. So should I fix or track?
That depends very much on your attitude to risk. If you fix, you can guarantee your payment for a specific period, normally 2, 3 5 or 10 years, but you won't benefit from future interest rate cuts, and a tracker rate that may have lower headline rate. There is no crystal ball, and "experts" consistently call rate changes incorrectly. So the most important thing to do, is get advice, look for what is important to you and consider how rate changes could affect your outgoings and lifestyle in the future.
9. Should I use my savings to reduce the rate?
Everyone should have a "rainy day fund". But if you have substantial savings, and are holding them in a poor returning deposit account, you may wish to reduce your mortgage debt - as this is a "guaranteed return". You may also wish to pay off a lump sum if you are near a loan to value (LTV) threshold, as you may be offered a better rate for doing so.
10. Is now the time to act?
Yes. Nobody knows if mortgage rates will continue to lower, or increase. However until you've had the conversation about what's available, you are not informed, and don't have the facts. Remortgaging can take as little as 1 day if staying with the same lender or 10 days if you switch provider, but factor in 4-8 weeks on average. Once you have the facts, you can then decide if it's the right time for you or not.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
