Use our UK Finance guide and learn by experience. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
Mortgage
Remortgage - The time is now
With all this talk of interest rates likely to fall in the coming months there are some really excellent fixed rate mortgage deals around, which will make now a good time to remortgage if you are in the position to do so that is.
Around this time 2 years ago the Bank of England base rate was at a low of 3.5% and may people this opportunity to fix there mortgage and ensure low repayment rates for a defined period of time. If you fixed period of time was 2 years then you deal will be coming to an end shortly and you will be faced with potential of your pay rate jumping by 3% when it reverts to your lenders standard variable rate.
Fortunately there are predictions on the horizon that before the end of the year the base rate will drop again, thus opening up a whole range of excellent deals.
Another type of mortgage to look into at the moment is a base rate tracker mortgage because your rate will fall with the base rate and give you the benefit of knowing exactly what it will be as soon as the cut is made, as they usually track it by a set amount. However, trackers don't offer you the security that fixed rates can as they can go up as well as down. Which mortgage you choose will depend on your financial situation, people with a strict budget will probably be better off with a fixed rate mortgage.
Taking action
If you are looking to remortgage, it's a good idea to start the ball rolling before you current mortgage comes to an end to avoid paying the SVR, but remortgaging is worthwhile at any time. There are 100's of reputable lenders offering thousands of different mortgage products, there is no reason for anyone to have to pay SVR.
Many people do not remortgage and the main reason for this is because people think it to long of a process or they are scared of making the wrong decision. When you remortgage you simply take out a mortgage with a different lender to payoff your existing mortgage, preferably at a lower rate. Switching deals within the same lender is not tech¬nically remortgaging as in that case you're simply changing the terms of your mortgage relationship with your current lender.
Big competition
The mortgage market is a highly competitive one, which means there are great deals for borrowers. With this in mind lenders are doing there best to win a share of the market by offering borrowers a range of incentives to encourage them to remortgage to their products, including paying your valuation and legal costs or not charging arrangement fees. This means the cost of remortgaging can be very low and now with interest rates looking to drop the competition is starting to hot up.
Careful consideration
Don't just look at the headline rate and upfront costs when choosing a deal to remortgage to, as more expensive deals with other features and better long-term value may be more suitable. For example, you may want to take out a flexible mortgage to allow you to over or underpay and withdraw funds and take payment holidays when you need to, or an offset mortgage to allow you to offset your credit against your debt and reduce the amount you pay interest on. A deal with freebies may not suit your circumstances.
