How To Remortgage For A Better Deal
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
How to Remortgage for a Better Deal
Summary
Gone are the days when staying with the same mortgage lender for the entire term was the norm. Nowadays, many borrowers realize the importance of shopping around to avoid overpaying on their largest financial commitment. Being proactive about remortgaging can save you money and provide more favorable terms.
Why Remortgage?
Switching mortgages might seem daunting, reminiscent of the complex process when you first bought your home. However, securing a remortgage is often simpler, with less paperwork and stress. It usually involves transferring your loan to a new lender offering a better interest rate.
Benefits of Remortgaging
1. Lower Monthly Payments: Remortgaging can significantly reduce your monthly repayments. It’s also an excellent opportunity to reassess your finances. You might choose to pay off some capital or borrow additional funds at competitive rates, which can be more advantageous than unsecured loans.
2. Fixed or Discounted Rates: When your current mortgage’s fixed or discounted rate ends, you can remortgage to avoid reverting to the standard variable rate (SVR). If interest rates rise, a once-competitive deal may no longer be appealing, especially if you have a tracker rate.
Potential Downsides
While remortgaging costs are generally lower than buying a property?"no stamp duty, no estate agent fees, and minimal legal fees?"there are still expenses involved. You may face:
- Valuation Fees: Often required by the new lender, though sometimes covered by them.
- Lender Arrangement Fees: These have risen significantly, averaging between £499 and 1.5% of the loan amount.
- Early Exit Charges: Some lenders charge a percentage of the mortgage balance if you exit early. Rates vary and can be as high as 6%.
Adding these costs to your mortgage means paying interest on them for the entire loan term.
Step-by-Step Guide to Remortgaging
1. Contact Your Current Lender: As your tie-in period ends, see what your existing lender can offer. This might reduce paperwork and costs.
2. Evaluate Fees: Consider fees for leaving your current lender. If they're too high, it might be best to wait until your tie-in period concludes.
3. Shop Around: Compare offers from other lenders. Look at the APR, which includes fees and costs, to make a well-informed decision.
4. Select a Mortgage Product: Choose the best option and start the application process.
5. Engage a Solicitor: If you’re using your own solicitor, contact them about the remortgage. Some lenders offer their own legal services.
6. Complete the Process: After the valuation and paperwork approval, your lender will send a formal mortgage offer. Sign it to finalize the transaction.
By following these steps and carefully considering all options, you can secure a more favorable mortgage deal that better suits your financial needs.
You can find the original non-AI version of this article here: How To Remortgage For A Better Deal.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.