The mortgage market can be an absolute minefield, so I have gathered some tips for you to suss out the best way to get a good deal on your remortgage.
Most people are in a fixed rate deal that is coming to an end or perhaps have been on their lender’s Standard Variable Rate for some time without realising there are better options available.
First things first, where do you start?
STEP 1 Check your credit score.
Most people do not check this regularly and sometimes when they come to remortgage, they find out that there are issues on their file that they were unaware of. I would recommend checking this on a monthly basis and finding out what you can do to improve your score, should it not be sitting at the top end of the spectrum.
Check out sites such as www.experian.co.uk or www.noddle.co.uk to do so
Don’t worry if there is any blemishes on your record it just gives us an idea of what rates we should expect.
There are options out there for those of you who have a poorer credit score but speaking to a mortgage broker about this is a good idea as they will have options that may not be available to you on the high street.
STEP -2 Compare Deals Online and Offline.
The best way of getting an understanding of what the best deal out there is to get rates and quotes from three areas
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Speak to your existing lender
about what rates are on offer if you stay with them. If they are offering a competitive rate, this will enable you to stay with your current bank with ease and with little/no cost.
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Speak to a mortgage broker (US) .Speak to SimpleFP or
other mortgage brokers in the market. We have the tools and the time to search the market accurately for you to find the best deal for your requirements. Some brokers have broker exclusive deals that you cant get on the High Street.
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Use a comparison site
. Check on these sites to compare what you have from a broker and your current lender.
A word to the wise though – brokers carry a qualification to enable them to know what the best deal for you is, and you gain protection through the Financial Ombudsman Service if you take advice. This is because the broker is liable for this advice. If you do this comparison yourself and it turns out to be the wrong choice – you are on your own with no chance of seeking any compensation!
STEP -3 – Pick the most costs effective not the one with the lowest rate.
Some important things to consider about your circumstances:
- Has the value of your house increased/decreased? Most people will find that their property has risen in value since they bought it, but this is not always the case. Try and get an idea from an estate agent about what the value is likely to be before you start the process. The lender will of course do their own valuation, however it is always a good thing to note before you approach them.
- What is your existing balance? Ask your current lender how much you owe them. A remortgage gives you the opportunity to borrow some more money on occasion, for home improvements or to clear some of your debts, so knowing how much you owe currently is important.
- Find out if your current deal has any penalties applicable – knowing when these expire will potentially save you thousands in exit fees.
To understand what looks like the best deal lets not assume that deals with fees aren’t the best deals !! The most important fact is how much you pay in total over the fixed mortgage deal is based on ( Two or Five year fixed rate )
You see some deals may have the most appealing rates on the surface, but once you dig deeper you find out you must pay £999 to the lender to secure this rate.
What you will find ………is a rate that is slightly higher, but carries no arrangement fee, can often work out as being more cost effective than a very low rate with a pricey fee on top.
Brokers usually charge a fee for the work they do, but using a broker who knows what they are doing and is keeping on top of things for you is invaluable and potentially faster to achieve your goal.
Most of them will allow you to add their fee on to the mortgage balance if you cannot pay this up front.
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